A firm with a DOL of 4.5 generates pretax profits of $1 million.If depreciation expense is $600,000,what are its other fixed costs?
A) $1.1 million
B) $2.1 million
C) $2.9 million
D) $3.9 million

Name: A firm with a DOL of 4.5 generates pretax profits of $1 million.If depreciation expense is $600,000,what are its other fixed costs? A) $1.1 million B) $2.1 million C) $2.9 million D) $3.9 million
Brand: Quizplus
Rating: 4.7 (38 reviews)

Question

Quizplus · Accepted Answer

DOL= 4.5 = 1 + (FC + $600,000) / $1,000,000; FC = $2,900,000

A Firm with a DOL of 4