What is the firms degree of operating leverage going from a


OceanGate sells external hard drives for $140 each. Its total fixed costs are $30 million, and its variable costs per unit are $100. The corporate tax rate is 30%. If the economy is strong, the firm will sell 4 million drives, but if there is a recession, it will sell only half as many. What is the firm's degree of operating leverage going from a recession to a strong economy? If the economy enters a recession, what will be the firm's after-tax profit?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What is the firms degree of operating leverage going from a
Reference No:- TGS02630688

Expected delivery within 24 Hours