Valesquez Corporation's operating leverage is 8.6. If the company's sales increase by 17%, its net operating income should increase by about:

Name: Valesquez Corporation's operating leverage is 8.6. If the company's sales increase by 17%, its net operating income should increase by about:
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Question

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Operating leverage indicates how a percentage change in sales will affect profits. With an operating leverage of 8.6, a 17% increase in sales would result in a 17% * 8.6 = 146.2% increase in net operating income.

Valesquez Corporation's Operating Leverage Is 8