A ﬁrm is reviewing a project that has ﬁxed costs of $123,500, variable costs of $189,700, sales of $427,600, and a 34% marginal tax rate. The project has no initial cash requirements. What is the
Degree of operating leverage for this project?
A) .61
B) 1.22
C) 1.61
D) 1.64
E) 2.64

Question

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The Answer of A ﬁrm is reviewing a project that has ﬁxed costs of $123,500, variable costs of $189,700, sales of $427,600, and a 34% marginal tax rate. The project has no initial cash requirements. What is the
Degree of operating leverage for this project?
A) .61
B) 1.22
C) 1.61
D) 1.64
E) 2.64

A ﬁRm Is Reviewing a Project That Has ﬁXed Costs