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.)

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
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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.)
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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