You estimate that Harbor Grain Corp. will generate $0.50 million of profit on sales of $10 million under normal economic conditions, and that the degree of operating leverage (DOL) is 3.5. What will profits be if sales turn out to be $8 million?

You estimate that Harbor Grain Corp. will generate $0.50 million of profit on sales of $10 million under normal economic conditions, and that the degree of operating leverage (DOL) is 3.5. What will profits be if sales turn out to be $8 million?

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

Please give me correct answer this financial accounting question

You estimate that Harbor Grain Corp. will generate $0.50
million of profit on sales of $10 million under normal economic
conditions, and that the degree of operating leverage (DOL) is
3.5.
What will profits be if sales turn out to be $8 million?

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