You estimate that your cattle farm will generate $1 million of profits on sales of $5.7 million under normal economic conditions and that the degree of operating leverage is 8. a. What will profits be if sales turn out to be $5.0 million? (Negative amount should be indicated by a minus sign. Round your answer to 1 decimal place.) b. What if they are $6.4 million? (Round your answer to 1 decimal place.)
You estimate that your cattle farm will generate $1 million of profits on sales of $5.7 million under normal economic conditions and that the degree of operating leverage is 8. a. What will profits be if sales turn out to be $5.0 million? (Negative amount should be indicated by a minus sign. Round your answer to 1 decimal place.) b. What if they are $6.4 million? (Round your answer to 1 decimal place.)
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 4EA: Assume a company is going to make an investment of $450,000 in a machine and the following are the...
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You estimate that your cattle farm will generate $1 million of profits on sales of $5.7 million under normal economic conditions and that the degree of operating leverage is 8.
a. What will profits be if sales turn out to be $5.0 million? (Negative amount should be indicated by a minus sign. Round your answer to 1 decimal place.)
b. What if they are $6.4 million? (Round your answer to 1 decimal place.)
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