Answered: If sales increase from R80 000 per year…

If sales increase from R80 000 per year to R120 000 per year, and if the operating leverage is 5, then net income should increase by: A. 167%. B. 100%. C. 334%. D. 250%.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 14P

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Question

If sales increase from R80 000 per year to R120 000 per year, and if the operating leverage is 5, then net income should increase by:

	A.	167%.
	B.	100%.
	C.	334%.
	D.	250%.

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