Question: Picture 1 fx A B C 1 Chapter 11 2 Question 11 D E F G H J K L M N 11. Calculating

Picture 1 fx A B C 1 Chapter 11 2 Question 11 D E F G H J K L M N 11. Calculating Operating Leverage [LO4] At an output level of 40,000 units, you calculate that the degree of operating leverage is 3.19. If output rises to 44,000 units, what will the percentage change in operating cash flow be? Will the new level of operating leverage be higher or loger? Explain. 3 4 Input area: 5 6 7 Initial output level 40,000 8 DOL 3.19 9 New output level 44,000 10 11 12 Output area: 13 14 15 AOCF 16 17 18 19 The new level of operating leverage is lower since FC/OCF is smaller.

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