Operating leverage at accounting break-even level of output

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Provide examples of businesses where network effects would or would not apply.

Consider a four-year project with the following information: initial fixed asset investment = $480,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $32; variable costs = $22; fixed costs = $170,000; quantity sold = 78,000 units; tax rate = 32 percent. What is the degree of operating leverage at the given level of output? (Do not round intermediate calculations. Round your answer to 4 decimal places, e.g., 32.1616.) Degree of operating leverage 1.8804 What is the degree of operating leverage at the accounting break-even level of output? (Do not round intermediate calculations. Round your answer to 4 decimal places, e.g., 32.1616.)

Reference no: EM132068965

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