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Johnson Manufacturing has a degree of operating leverage of 2.8 when sales are $200,000. If sales increase to $230,000, profits would be expected to increase by what percent? a. 15% b. 28% c. 42% d. 2.8%

Johnson Manufacturing has a degree of operating leverage of 2.8 when sales are $200,000. If sales increase to $230,000, profits would be expected to increase by what percent? a. 15% b. 28% c. 42% d. 2.8%

EBK CFIN
EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter16: Financial Planning And Control
Section: Chapter Questions
Problem 18PROB
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Johnson Manufacturing has a degree of operating leverage of 2.8 when sales are $200,000. If sales increase to $230,000, profits would be expected to increase by what percent? a. 15% b. 28% c. 42% d. 2.8%
Transcribed Image Text:Johnson Manufacturing has a degree of operating leverage of 2.8 when sales are $200,000. If sales increase to $230,000, profits would be expected to increase by what percent? a. 15% b. 28% c. 42% d. 2.8%
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