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24. Controlling operations with operating leverage. Treat each case independently. (EBIT is earmings before interest and taxes) 1. A business has an operating leverage of 5.0. If it wants to increase its EBIT by 200%, what would be its change in sales? A business has projected to increase its sales by 10% and wants to increase its EBIT by 120%, what would be its degree of operating leverage? A business has an operating leverage of 7.0 and expects to increase its sales by 20%, what would be its percentage change in EBIT? A business has an operating leverage of 4.5 and expects a decrease in sales of 15%, what would be the change EBIT? 2. 3. 4.

24. Controlling operations with operating leverage. Treat each case independently. (EBIT is earmings before interest and taxes) 1. A business has an operating leverage of 5.0. If it wants to increase its EBIT by 200%, what would be its change in sales? A business has projected to increase its sales by 10% and wants to increase its EBIT by 120%, what would be its degree of operating leverage? A business has an operating leverage of 7.0 and expects to increase its sales by 20%, what would be its percentage change in EBIT? A business has an operating leverage of 4.5 and expects a decrease in sales of 15%, what would be the change EBIT? 2. 3. 4.

EBK CFIN
EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter16: Financial Planning And Control
Section: Chapter Questions
Problem 19PROB
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24. Controlling operations with operating leverage. Treat each case independently. (EBIT is earnings before interest and taxes) A business has an operating leverage of 5.0. If it wants to increase its EBIT by 200%, what would be its change in sales? 1. 2. A business has projected to increase its sales by 10% and wants to increase its EBIT by 120%, what would be its degree of operating leverage? A business has an operating leverage of 7.0 and expects to increase its sales by 20%, what would be its percentage change in EBIT? 4. A business has an operating leverage of 4.5 and expects a decrease in sales of 15%, what would be the change EBIT? 3.
Transcribed Image Text:24. Controlling operations with operating leverage. Treat each case independently. (EBIT is earnings before interest and taxes) A business has an operating leverage of 5.0. If it wants to increase its EBIT by 200%, what would be its change in sales? 1. 2. A business has projected to increase its sales by 10% and wants to increase its EBIT by 120%, what would be its degree of operating leverage? A business has an operating leverage of 7.0 and expects to increase its sales by 20%, what would be its percentage change in EBIT? 4. A business has an operating leverage of 4.5 and expects a decrease in sales of 15%, what would be the change EBIT? 3.
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