(Using degree of operating leverage) Last year Baker-Huggy Inc. had fixed costs of $120,000 and net operating income of $29,000. If sales increase by 17 percent, by how much will the firm's NOI increase? What would happen to the firm's NOI if sales decreased by 20 percent? If sales increase by 17%, the change in the firm's NOI will be of ]%. (Select from the drop-down menu and round to two decimal places.) If sales decrease by 20%, the change in the firm's NOI will be of %. (Select from the drop-down menu and round to two decimal places.)

(Using degree of operating leverage) Last year Baker-Huggy Inc. had fixed costs of $120,000 and net operating income of $29,000. If sales increase by 17 percent, by how much will the firm's NOI increase? What would happen to the firm's NOI if sales decreased by 20 percent? If sales increase by 17%, the change in the firm's NOI will be of ]%. (Select from the drop-down menu and round to two decimal places.) If sales decrease by 20%, the change in the firm's NOI will be of %. (Select from the drop-down menu and round to two decimal places.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 10P

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