Consider the previous question with the following new information: Fixed costs are assumed to be $500,000...

Consider the previous question with the following new information: Fixed costs are assumed to be $500,000 per year. The company estimates the variable cost per unit (v) to be $75 and expects to sell each unit for $425. There are no taxes and the required rate of return is 22% per year. Suppose that sales are currently estimated to be 5000 units per year.

What is the degree of operating leverage? (Round to 1 decimal place, ie 2.3)

Using your answer from above, estimate what the new monthly operating cash flow (OCF) will be if sales increase by 100 units: $ (Round your answer to the nearest whole dollar, and do NOT use commas in your response, ie. 456789)

Expert Solution

jeff jeffy answered 6 months ago

Fixed costs are assumed to be $500,000 per year. The company estimates the variable cost per...

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Use the following information to answer the question below: a project with fixed costs of $240,000...

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Consider the previous question with the following new information: Fixed costs are assumed to be $500,000...

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