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what will be the new net income?

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

An all-equity financed firm has a degree of operating leverage of 3, the sales of $250,000, the operating income of $50,000, and the net income of $40,000. If the sales drops to $220,000, what will be the new net income?

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