At an output level of 72,000 units, you calculate that the degree of operating leverage (DOL) is 2.8. Suppose fixed costs are $200,000. a. What is the operating cash flow at 65,000 units? (Do not round intermediate calculations and round your final answer to the nearest whole number, e.g., 32.) b. What is the new degree of operating leverage? (Do not round intermediate calculations and round your final answer to 3 decimal places, e.g., 32.161.)
At an output level of 72,000 units, you calculate that the degree of operating leverage (DOL) is 2.8. Suppose fixed costs are $200,000. a. What is the operating cash flow at 65,000 units? (Do not round intermediate calculations and round your final answer to the nearest whole number, e.g., 32.) b. What is the new degree of operating leverage? (Do not round intermediate calculations and round your final answer to 3 decimal places, e.g., 32.161.)
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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Transcribed Image Text:At an output level of 72,000 units, you calculate that the
degree of operating leverage (DOL) is 2.8. Suppose fixed
costs are $200,000.
a. What is the operating cash flow at 65,000 units? (Do
not round intermediate calculations and round your final
answer to the nearest whole number, e.g., 32.)
b. What is the new degree of operating leverage? (Do not
round intermediate calculations and round your final
answer to 3 decimal places, e.g., 32.161.)
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