Question: Magellen Industries is analyzing a new project. The data they have gathered to date is as follows: Initial requirement for equipment: $120,000 Depreciation: Straight-line to

Magellen Industries is analyzing a new project. The data they have

Magellen Industries is analyzing a new project. The data they have gathered to date is as follows: Initial requirement for equipment: $120,000 Depreciation: Straight-line to zero over the four-year life of the project with no salvage value. Required rate of return: 15% Marginal tax rate: 35% What is the degree of operating leverage under the worst-case scenario? Multiple Choice 1.63 1.93 1.07 2.07 .93

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