At an output level of 100,000 units, you calculate that the degree of operating leverage (DOL) is 2.5. Suppose fixed costs are $250,000. a. What is the operating cash flow at 95,000 units? b. What is the degree of operating leverage?
At an output level of 100,000 units, you calculate that the degree of operating leverage (DOL) is 2.5. Suppose fixed costs are $250,000. a. What is the operating cash flow at 95,000 units? b. What is the degree of operating leverage?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 4EB: Assume a company is going to make an investment in a machine of $825,000 and the following are the...
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Financial accouinting
Transcribed Image Text:At an output level of 100,000 units, you calculate that the
degree of operating leverage (DOL) is 2.5. Suppose fixed
costs are $250,000.
a. What is the operating cash flow at 95,000 units?
b. What is the degree of operating leverage?
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