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What is the firm degree of operating leverage

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Problem - A firm has operating profits, or EBIT, of $400,000 at the end of Year 1 and $450,000 at the end of Year 2. Their sales were $1 million and $1.2 million at each respective year end. What is the firm's degree of operating leverage (DOL) at the end of Year 2?

a. 0.25

b. 0.375

c. 0.4

d. 0.625

Reference no: EM132714850

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