Chapter 16 Assignment Attempts: Average: /2 y Tools Tips Tips Unlimited 2 Days 4. A review of the degree of operating leverage (DOL) It is December 31. Last year, Praxis Corporation had sales of $16,000,000, and it forecasts that next year's sales will be $17,120,000. Its fixed costs have been and are expected to continue to be $1,200,000, and its variable cost ratio is 40.00 %. Praxis's capital structure consists of a $13.5 million bank loan, on which it pays an interest rate of 6%, and 300,000 shares of common equity. The company's profits are taxed at a marginal rate of 35%. Given this data, complete the following sentences: The percentage change in the company's sales is The percentage change in EBIT is The degree of operating leverage (DOL) at $17,120,000 is There are several ways to use and interpret a firm's DOL value. Consider the following statement and indicate whether it accurately reflects the meaning or an appropriate use of a firm's DOL value. Options pre ck At sales of $24 million, Firm X's DOL is 1.75, and Firm C's DOL is 6.50. Firm C exhibits a lower level of business risk than Firm X. True or False: This statement accurately describes a firm's DOL True O False