At an output level of 25,000 units, the degree of operating leverage is 2.75. The operating cash flow is $65,000 in this case. What will the operating cash flow be if output falls to 23,750 units?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
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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I need help with this general accounting question using standard accounting techniques.

At an output level of 25,000 units, the degree of operating leverage
is 2.75. The operating cash flow is $65,000 in this case. What will the
operating cash flow be if output falls to 23,750 units?
Transcribed Image Text:At an output level of 25,000 units, the degree of operating leverage is 2.75. The operating cash flow is $65,000 in this case. What will the operating cash flow be if output falls to 23,750 units?
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