Pinnacle Corp had originally expected to earn operating income of $320,000 in the coming year. Pinnacle's degree of operating leverage is 2.6. Recently, Pinnacle revised its plans and now expects to increase sales by 18% next year. What is the percent change in operating income expected by Pinnacle in the coming year?
Pinnacle Corp had originally expected to earn operating income of $320,000 in the coming year. Pinnacle's degree of operating leverage is 2.6. Recently, Pinnacle revised its plans and now expects to increase sales by 18% next year. What is the percent change in operating income expected by Pinnacle in the coming year?
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter12: Corporate Valuation And Financial Planning
Section: Chapter Questions
Problem 3P: Smiley Corporations current sales and partial balance sheet are shown here. Sales are expected to...
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Transcribed Image Text:Pinnacle Corp had originally expected to earn operating income of $320,000 in
the coming year. Pinnacle's degree of operating leverage is 2.6. Recently,
Pinnacle revised its plans and now expects to increase sales by 18% next year.
What is the percent change in operating income expected by Pinnacle in the
coming year?
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