At an output level of 48,000 units, you calculate that the degree of operating leverage is 1.60. If output rises to 73,920 units, what will the percentage change in operating cash flow be? a. 86.40% b. 56.10% c. 90.72% d. 88.99% e. 82.08%

At an output level of 48,000 units, you calculate that the degree of operating leverage is 1.60. If output rises to 73,920 units, what will the percentage change in operating cash flow be? a. 86.40% b. 56.10% c. 90.72% d. 88.99% e. 82.08%

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...

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Question

Opereting cash flow to be ?

At an output level of 48,000 units, you
calculate that the degree of operating
leverage is 1.60. If output rises to 73,920
units, what will the percentage change in
operating cash flow be?
a. 86.40%
b. 56.10%
c. 90.72%
d. 88.99%
e. 82.08%

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