The following table represents forecasted sales information for Fabregas Co. Information Sales in units Sales revenues...
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The following table represents forecasted sales information for Fabregas Co. Information Sales in units Sales revenues Variable cost of goods sold Gross profit Fixed operating costs Net operating income Forecasted Operations (in millions) 150.00 $2,625.00 (1,500.00) $1,125.00 (180.00) $945.00 Sales with 20,00% Increase (in millions) 180.00 $3,150.00 (1,800.00) $1,350.00 (180.00) $1,170.00 Unit Change (in millions) 30.00 $525.00 (300,00) $225.00 (0.00) $225.00 By how much will net operating income increase for the given increase in sales and associated expenses? Using the percent change in net operating income computed in the previous section, calculate the degree of operating leverage for the projected change of 20.00% from the original forecast. Assuming an identical cost structure, compared to a company with a degree of operating leverage 1.08, how risky is Fabregas Co. compared to the other company? The following table represents forecasted sales information for Fabregas Co. Information Sales in units Sales revenues Variable cost of goods sold Gross profit Fixed operating costs Net operating income Forecasted Operations (in millions) 150.00 $2,625.00 (1,500.00) $1,125.00 (180.00) $945.00 Sales with 20,00% Increase (in millions) 180.00 $3,150.00 (1,800.00) $1,350.00 (180.00) $1,170.00 Unit Change (in millions) 30.00 $525.00 (300,00) $225.00 (0.00) $225.00 By how much will net operating income increase for the given increase in sales and associated expenses? Using the percent change in net operating income computed in the previous section, calculate the degree of operating leverage for the projected change of 20.00% from the original forecast. Assuming an identical cost structure, compared to a company with a degree of operating leverage 1.08, how risky is Fabregas Co. compared to the other company?
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