Question: Financial accounting analysis exercise find the solution for better understanding 6-2 2. Operating income (EBIT) is $40,000. Variable operating expenses are 75% of sales and

Financial accounting analysis exercise find the solution for better understanding 6-2

Financial accounting analysis exercise find the solution for better understanding 6-2 2.

2. Operating income (EBIT) is $40,000. Variable operating expenses are 75% of sales and operating fixed expenses are $10,000. Calculate operating leverage (OLE). What will NOPAT be if sales decline by 20%. Assume a 40% tax rate. CM = contribution margin. OLE = CM/EBIT

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