Question: What is the lowest possible value for the degree of operating leverage for a profitable firm? Show with a numerical example that if Modern Artifacts

What is the lowest possible value for the degree of operating leverage for a profitable firm? Show with a numerical example that if Modern Artifacts (see Problem 14) has zero fixed costs, then DOL = 1 and in fact sales and profits are directly proportional, so a 1% change in sales results in a 1% change in profits.

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DOL If profits are positive DOL cannot be less than 10 At sales 7000 profits ... View full answer

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