Larger Company had originally expected to earn operating income of Php130,000 in the coming year. Its degree of operating leverage is 2.4. Recently, larger revised its plan and now expects to increase sales by 20% next year. What is the percentage change in operating income for the coming year? a. 8.33% b. 48.00% c. 20.00% d. 54.17%
Larger Company had originally expected to earn operating income of Php130,000 in the coming year. Its degree of operating leverage is 2.4. Recently, larger revised its plan and now expects to increase sales by 20% next year. What is the percentage change in operating income for the coming year? a. 8.33% b. 48.00% c. 20.00% d. 54.17%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Larger Company had originally expected to earn operating income of
Php130,000 in the coming year. Its degree of operating leverage is 2.4.
Recently, larger revised its plan and now expects to increase sales by 20%
next year. What is the percentage change in operating income for the
coming year?
a. 8.33%
b. 48.00%
c. 20.00%
d. 54.17%
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