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 change
D)2.27 percent increase
E)15.84 percent increase

Question

Quizplus · Accepted Answer

Percentage change in OCF = 2.64 F1F1F1S1F1F1F10 0.06 = 15.84 percent increase

You Are in Charge of a Project That Has a Degree