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Consider a three-year project with the following information: initial fixed asset investment = $450,000; straight-line depreciation to zero over the three-year life; zero salvage value; price = $35; variable costs = $20; fixed costs $220,000; quantity sold = 65,000 units; tax rate = 30 percent. What is the degree of operating leverage at the given level of output? (Do not round intermediate calculations. Round your answer to 4 decimal places.)

Consider a three-year project with the following information: initial fixed asset investment = $450,000; straight-line depreciation to zero over the three-year life; zero salvage value; price = $35; variable costs = $20; fixed costs $220,000; quantity sold = 65,000 units; tax rate = 30 percent. What is the degree of operating leverage at the given level of output? (Do not round intermediate calculations. Round your answer to 4 decimal places.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Consider a three-year project with the following information: initial fixed asset investment = $450,000; straight-line depreciation to zero over the three-year life; zero salvage value; price = $35; variable costs = $20; fixed costs $220,000; quantity sold = 65,000 units; tax rate = 30 percent. What is the degree of operating leverage at the given level of output? (Do not round intermediate calculations. Round your answer to 4 decimal places.)
Transcribed Image Text:Consider a three-year project with the following information: initial fixed asset investment = $450,000; straight-line depreciation to zero over the three-year life; zero salvage value; price = $35; variable costs = $20; fixed costs $220,000; quantity sold = 65,000 units; tax rate = 30 percent. What is the degree of operating leverage at the given level of output? (Do not round intermediate calculations. Round your answer to 4 decimal places.)
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