At an output level of 19,500 units, you have calculated that the degree of operating leverage is 2.92. The operating cash flow is $66,300 in this case. Ignoring the effect of taxes, what are fixed costs? Provide answer

At an output level of 19,500 units, you have calculated that the degree of operating leverage is 2.92. The operating cash flow is $66,300 in this case. Ignoring the effect of taxes, what are fixed costs? Provide answer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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At an output level of 19,500 units, you have calculated that the degree of operating leverage is 2.92. The operating cash flow is $66,300 in this case. Ignoring the effect of taxes, what are fixed costs?
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