Perform a what if analysis to see how operating results will change if sales increase by 12%
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Question:
Perform a “what if” analysis to see how operating results will change if sales increase by 12% during the second year of operating.
a) What is the new net operating income?
b) What is the new degree of operating leverage?
c) If sales increased by 10% in the third year, what percentage growth in profit can the company expect?
d) What is the predicted operating profit in year 3?
Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1133161646
7th Edition
Authors: Gary A. Porter, Curtis L. Norton
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