Redmont Inc.'s operating leverage is 7.5. If the company's sales increase by 12%, its net operating income should increase by about: (A) 90.0% (B) 12.0% (C) 62.5% (D) 7.5%
Redmont Inc.'s operating leverage is 7.5. If the company's sales increase by 12%, its net operating income should increase by about: (A) 90.0% (B) 12.0% (C) 62.5% (D) 7.5%
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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Question
Net operating income should increase by?
Transcribed Image Text:Redmont Inc.'s operating leverage is 7.5. If the
company's sales increase by 12%, its net operating
income should increase by about:
(A) 90.0%
(B) 12.0%
(C) 62.5%
(D) 7.5%
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