Question: Operating Leverage Company X estimates that its business will generate $2.0 million in profits if the sales are $5.0 million. If the sales drop to

Operating Leverage Company X estimates that its business will generate $2.0 million in profits if the sales are $5.0 million.

If the sales drop to $4.0 million, what is the percentage change in sales? ____________% (Make sure you use the correct sign. Enter a value in percentage with NO decimal places)

If the degree of operating leverage (DOL) is 6, what is the percentage change in profit?__________ % (Make sure you use the correct sign. Enter a value in percentage with NO decimal places)

How much would the new profit be in $ millions? $______________ million (enter a value with one decimal place)

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