None If sales increase from $80,000 per year to $120,000 peryear, and if the operating leverage is 5, then net incomeshould increase by:A. 167%.B. 100%.C. 334%.D. 250%.

The problem requires the determination of the percentage increase in net income. This can be…

Answered: If sales increase from $80,000 per year…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...

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If sales increase from $80,000 per year to $120,000 per year, and if the operating leverage is 5, then net income should increase by: A. 167%. B. 100%. C. 334%. D. 250%.