6 Help Save & Exit Submit Check my work Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1 million in a start-up firm. He is nervous, however, about future economic volatility He asks you to analyze the following financial data for the past year's operations of the two firms he is considering and give him some business advice Varlable cost per unit (a) Sales revenue (B,700 units $38.88) Varsable cost (8,780 units xa) Contribution sargin Fixed cost 5 28.88 5 261,eee 261,000 87,6 374,000 62,900 174,000)(87.00) Net incose $ 62,900 Required a. Use the contribution margin approach to compute the operating leverage for each firm b. If the economy expands in coming years, Larson and Benson ill both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged Compute the change in net income for each firm in dollar amount and in percentage (Note Since the number of units increases, both revenue and varioble cost wil increase ) c. if the economy contracts in coming years, Larson and Benson wil both suffer a 12 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dolar amount and in percentage Note Since the number of units decreases, both total revenue and total variable cost will decrease ) Prey 6of6??? Next