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Apex Corporation had originally projected operating income of $750,000 for the upcoming fiscal year. Apex's degree of operating leverage is 2.5. Due to a new marketing campaign, Apex now anticipates that sales will increase by 12% compared to the original projection. What percent change in operating income can Apex expect as a result of the revised sales projection?

Apex Corporation had originally projected operating income of $750,000 for the upcoming fiscal year. Apex's degree of operating leverage is 2.5. Due to a new marketing campaign, Apex now anticipates that sales will increase by 12% compared to the original projection. What percent change in operating income can Apex expect as a result of the revised sales projection?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 7P
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Please provide the solution to this general accounting question using proper accounting principles.

Apex Corporation had originally projected operating income of $750,000 for the upcoming fiscal year. Apex's degree of operating leverage is 2.5. Due to a new marketing campaign, Apex now anticipates that sales will increase by 12% compared to the original projection. What percent change in operating income can Apex expect as a result of the revised sales projection?
Transcribed Image Text:Apex Corporation had originally projected operating income of $750,000 for the upcoming fiscal year. Apex's degree of operating leverage is 2.5. Due to a new marketing campaign, Apex now anticipates that sales will increase by 12% compared to the original projection. What percent change in operating income can Apex expect as a result of the revised sales projection?
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