If the sales of a company grows by 25 percent in a year, how much its gross profit will increase? Assume that company have a ROE = 15 %, degree of operating leverage = 3, and plowback ratio = 5 O 7.5% O 8.33% 28% O 75%
If the sales of a company grows by 25 percent in a year, how much its gross profit will increase? Assume that company have a ROE = 15 %, degree of operating leverage = 3, and plowback ratio = 5 O 7.5% O 8.33% 28% O 75%
Chapter16: Financial Planning And Control
Section: Chapter Questions
Problem 19PROB
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Transcribed Image Text:QUESTION 9
If the sales of a company grows by 25 percent in a year, how much its gross profit will increase? Assume that company have a ROE = 15 %, degree of operating leverage = 3, and plowback ratio = 50 %.
O 7.5 %
O 8.33 %
O 28 %
O 75 %
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