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At an output level of 25,000 units, the degree of operating leverage is 2.25. If output decreases to 20,000 units, what will the percentage change in operating cash flow be? a. -45.00% b. -20.00% c. -25.00% d. -35.50% e. -52.50%

At an output level of 25,000 units, the degree of operating leverage is 2.25. If output decreases to 20,000 units, what will the percentage change in operating cash flow be? a. -45.00% b. -20.00% c. -25.00% d. -35.50% e. -52.50%

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 7P
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At an output level of 25,000 units, the degree of operating leverage is 2.25. If output decreases to 20,000 units, what will the percentage change in operating cash flow be? a. -45.00% b. -20.00% c. -25.00% d. -35.50% e. -52.50%
Transcribed Image Text:At an output level of 25,000 units, the degree of operating leverage is 2.25. If output decreases to 20,000 units, what will the percentage change in operating cash flow be? a. -45.00% b. -20.00% c. -25.00% d. -35.50% e. -52.50%
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