You are managing a technology start-up with a degree of operating leverage (DOL) of 1.15. What will happen to the operating cash flows if the number of units sold increases by 8.4 percent? a. 9.66 percent increase b. 7.30 percent decrease c. 8.40 percent increase d. 9.66 percent decrease
You are managing a technology start-up with a degree of operating leverage (DOL) of 1.15. What will happen to the operating cash flows if the number of units sold increases by 8.4 percent? a. 9.66 percent increase b. 7.30 percent decrease c. 8.40 percent increase d. 9.66 percent decrease
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
Section: Chapter Questions
Problem 25SP: Start with the partial model in the file Ch07 P25 Build a Model.xlsx on the textbook’s Web site....
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Transcribed Image Text:You are managing a technology start-up with a degree of operating
leverage (DOL) of 1.15. What will happen to the operating cash flows if
the number of units sold increases by 8.4 percent?
a. 9.66 percent increase
b. 7.30 percent decrease
c. 8.40 percent increase
d. 9.66 percent decrease
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