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%
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
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
Section: Chapter Questions
Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...
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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%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4c008796-ae5d-49a8-94b7-03ab3391b546%2F0989a583-e4b7-44b5-97b0-d6ef79b650e4%2Fqqbtke5_processed.jpeg&w=3840&q=75)
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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