Determining the new degree of operating leverage
A proposed project has fixed costs of $36,000 per year. The operating cash flow at 18,000 units is $58,000. What will be the new degree of operating leverage if the number of units sold rises to 18,500?
A. 1.46
B. 1.59
C. 1.67
D. 2.08
E. 2.14
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