Question

$120 each will be sold at Barnes. $1,800 per year are the non depreciation

fixed costs, and $70 per unit are the variable costs. The initial investment of $5,400 will be depreciated straight-line over its useful life of 6 years to a final value of zero, and 18% is the discount rate.

a.

When the sales are $7440.00 what is the degree of operating leverage?

b.

When sales are $12000.00 what is the degree of operating leverage?

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