Operating leverage at financial break-even level of output

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Reference no: EM131020275

Carlton Industries is considering a new project that they plan to price at $74.00 per unit. The variable costs are estimated at $39.22 per unit and total fixed costs are estimated at $12,085. The initial investment required is $8,000 and the project has an estimated life of 4 years. The firm requires a return of 8 percent. Ignore the effect of taxes. What is the degree of operating leverage at the financial break-even level of output?

3.691

4.528

6.003

7.337

Reference no: EM131020275

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