Please provide correct answer accounting question If pretax profits decrease by 13.8% when the DOL is 3.8, then thedecrease in sales is:a. 2.75%b. 0.28%c. 3.63%d. 10%

Step 1: Define Operating LeverageThere are various methods to calculate the degree of operating…

Answered: If pretax profits decrease by 13.8%…

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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If pretax profits decrease by 13.8% when the DOL is 3.8, then the decrease in sales is: a. 2.75% b. 0.28% c. 3.63% d. 10%