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EBK CONTEMPORARY FINANCIAL MANAGEMENT

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 11P

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Question

At a sales level of $270,000, the magnitude of operating leverage for Donuts unlimited is 1.5.

At a sales level of $270,000, the magnitude of
operating leverage for Donuts Unlimited is 1.5. If
sales increase by 20%, profits (net income) will
increase by:
a. 20%
b. 1.5%
c. 15%
d. 30%

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