Question: Consider the previous question with the following new information: Fixed costs are assumed to be $ 5 5 0 , 0 0 0 per year.

Consider the previous question with the following new information: Fixed costs are assumed to be $550,000 per year. The company estimates the variable cost per unit (v) to be $120 and expects to sell each unit for $425. There are no taxes and the required rate of return is 17% per year. Suppose that sales are currently estimated to be 5400 units per year.
What is the degree of operating leverage? Blank 1. Fill in the blank, read surrounding text.
(Round to the CLOSEST 1 decimal place, ie 2.3)
Using your answer from above, ESTIMATE what the new annual operating cash flow (OCF) will be if sales increase by 150 units: $ Blank 2. Fill in the blank, read surrounding text.
(Round your answer to the nearest $1000, and do NOT use commas in your response, ie.1234000)

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