A project has projected sales of 25,600 units with a selling price of $4.95 each. Annual fixed costs are $31,000 with variable costs of $2.18 per unit. The project has a three-year life and requires an initial investment of $62,900 for equipment. The equipment will be depreciated straight-line to zero over three years. The tax rate is 34%. 

What is the project's degree of operating leverage at the given level of output?

Answer rating: 100% (QA)

SOLUTION The degree of operating leverage DOL measures the percentage change in operating income resulting from a percentage change in sales It can be ... View the full answer