Mendel Incorporated has an operating leverage of 3.8. If the company's sales increase by 10%, its net operating income should increase by about:

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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Mendel Incorporated has an operating leverage of 3.8. If the company's sales increase by 10%, its net operating income should increase by about:

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Operating leverage = 3.8

Increase in sales = 10%

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