Pacific Corp. has an operating leverage of 4.0. If the company's sales increase by 20%, its net operating income should increase by about: a. 5.0% b. 20.0% c. 80.0% d. 65.0%

Financial Management: Theory & Practice
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Chapter7: Corporate Valuation And Stock Valuation
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Pacific Corp. has an operating leverage of 4.0. If the company's sales increase
by 20%, its net operating income should increase by about:
a. 5.0%
b. 20.0%
c. 80.0%
d. 65.0%
Transcribed Image Text:Pacific Corp. has an operating leverage of 4.0. If the company's sales increase by 20%, its net operating income should increase by about: a. 5.0% b. 20.0% c. 80.0% d. 65.0%
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