Solve this accounting problem not use ai At a sales level of $270,000, the magnitude ofoperating leverage for Donuts Unlimited is 1.5. Ifsales increase by 20%, profits (net income) willincrease by:a. 20%b. 1.5%c. 15%d. 30%

Step 1:- Define Operating LeverageOperating leverage indicates the percentage change in operating…

Answered: At a sales level of $270,000, the…

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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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%