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You are in charge of a project that has a degree of operating leverage of 2.64.

ID: 2696043 • Letter: Y

Question

You are in charge of a project that has a degree of operating leverage of 2.64. What will happen to the operating cash flows if the number of units you sell increase by 6 percent?
a. 15.84 percent decrease b. 2.27 percent decrease c. no chage d. 2.27 percent increase e. 15.84 percent increase
please show work because I do not understand how to do this.

You are in charge of a project that has a degree of operating leverage of 2.64. What will happen to the operating cash flows if the number of units you sell increase by 6 percent?
a. 15.84 percent decrease b. 2.27 percent decrease c. no chage d. 2.27 percent increase e. 15.84 percent increase
please show work because I do not understand how to do this.

You are in charge of a project that has a degree of operating leverage of 2.64. What will happen to the operating cash flows if the number of units you sell increase by 6 percent?
a. 15.84 percent decrease b. 2.27 percent decrease c. no chage d. 2.27 percent increase e. 15.84 percent increase
please show work because I do not understand how to do this.

Explanation / Answer

e. 15.84 percent increase

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