You estimate that your cattle farm will generate $0.20 million of profits on sales of $4 million under normal economic conditions and that the degree of operating leverage is 5. a. What will profits be if sales turn out to be $3.2 million? b. What will profits be if sales turn out to be $4.8 million? (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.)
You estimate that your cattle farm will generate $0.20 million of profits on sales of $4 million under normal economic conditions and that the degree of operating leverage is 5. a. What will profits be if sales turn out to be $3.2 million? b. What will profits be if sales turn out to be $4.8 million? (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.)
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 4EA: Assume a company is going to make an investment of $450,000 in a machine and the following are the...
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You estimate that your cattle farm will generate $0.20 million of profits on sales of $4 million under normal economic conditions and that the degree of operating leverage is 5.
a. What will profits be if sales turn out to be $3.2 million?
b. What will profits be if sales turn out to be $4.8 million? (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.)
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