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Diane Fabrics has a magnitude of operating leverage of 2 at a sales level of $320,000. If sales increase by 10%, profits (net income) will increase by a. 5% b. 10% c. 15% d. 20%

Diane Fabrics has a magnitude of operating leverage of 2 at a sales level of $320,000. If sales increase by 10%, profits (net income) will increase by a. 5% b. 10% c. 15% d. 20%

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section: Chapter Questions
Problem 11P
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Diane Fabrics has a magnitude of operating leverage of 2 at a sales level of $320,000. If sales increase by 10%, profits (net income) will increase by a. 5% b. 10% c. 15% d. 20%
Transcribed Image Text:Diane Fabrics has a magnitude of operating leverage of 2 at a sales level of $320,000. If sales increase by 10%, profits (net income) will increase by a. 5% b. 10% c. 15% d. 20%
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