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%.

Cornerstones of Cost Management (Cornerstones Series)
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Author:Don R. Hansen, Maryanne M. Mowen
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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%.
Transcribed Image Text: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%.
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