At a sales level of $480,000, the magnitude of operating leverage for Quantum Computing Inc. is 3.2. If sales increase by 12%, profits (net income) will increase by: a. 12% b. 38.4% c. 31.2% d. 42%

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 $480,000, the magnitude of operating leverage for Quantum
Computing Inc. is 3.2. If sales increase by 12%, profits (net income) will
increase by:
a. 12%
b. 38.4%
c. 31.2%
d. 42%
Transcribed Image Text:At a sales level of $480,000, the magnitude of operating leverage for Quantum Computing Inc. is 3.2. If sales increase by 12%, profits (net income) will increase by: a. 12% b. 38.4% c. 31.2% d. 42%
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