Equillion, Inc., and Storis, Inc., are two companies in the pharmaceutical industry. Equillion has relatively high fixed
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a. Which company has the higher operating leverage?
b. Calculate the expected percentage change in profit for a 20 percent increase (and for a 20 percent decrease) in sales for each company. (Round to the nearest percentage.)
c. Which company is more risky?
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Sales Less variable costs Less fixed costs Presi Equillion, Inc. $150,000,000 37,500,000 90,000,000 22,500,000 Storis, Inc. $150,000,000 90,000,000 37,500,000 22,500,000
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a Equillion has the highest operating leverage note that it has 90000...View the full answer
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