In the previous problem, what is the degree of operating leverage at the given level of output? What is the degree of operating leverage at the accounting break-even level of output?
(Previous Problem) 17) Consider a four-year project with the following information: initial fixed asset investment=$420,000; straight-line depreciation to zero over the four year life; zero salvage life value; price=$25; variable costs=$16; fixed costs=$180,000; quantity sold=75,000 units; tax rate= 34%. How sensitive is OCF to changes in quantity sold?