What is the degree of operating leverage for the project

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Problem 1: Ann Marie has noted that every time the sales quantity increases by 3 per cent for a particular project, the operating cash flow for the project increases by 5 per cent. What is the degree of operating leverage for this project if the contribution margin is R4?

A. 0,42

B. 1,67

C. 2,33

D. 4,51

E. 5,67

Problem 2: The fixed costs of a project are R8 000. The depreciation expense is R3 500 and the operating cash flow is R20 000. What is the degree of operating leverage for this project?

A. 0,40

B. 0,71

C. 0,87

D. 1,40

E. 2,50

Reference no: EM132656403

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