Following is a set of pro forma (or projected) income statements for a company. The columns labeled A are projected results for the company if it follows Strategy A. The columns labeled B are projected results for the company if it follows Strategy B.

Required
Study the information given and discuss each of the following.
A. The comparative risk of Strategy A versus Strategy B, as shown in the projected net income results
B. The company€™s operating leverage
C. The company€™s investmentstrategy

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Low sales Medium sales High sales Sales Cost of sales Depreciation Wages expense Other operating expenses Operating income Income tax (expense) or savings_72) 46 (282) 84)(527) (613 Net income $3.000 $3,000 $4,000 $4,000 $5,000 $5,000 (180) (180 (240) 240 (300) (300) (315) (450) (355) (450) (395) (450) (1,300 1,500) 1,600) 1,500) 1,800) 1,500) 1.000) (1000) 1000) (1.000) (1000) (1000 205 130) 805 810 ,505 1,750 $ 133 S (84) S523 $ 526 S 978 $1137