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What will profits be if sales turn out

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You estimate that your cattle farm will generate $0.40 million of profits on sales of $8 million under normal economic conditions and that the degree of operating leverage is 2.

a. What will profits be if sales turn out to be $4.0 million? (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Enter your answers in millions.)

Profit will increase/decrease to __________ million

b. What will profits be if sales turn out to be $12.0 million? (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.)

Profit will increase/decrease to __________ million

Reference no: EM132540775

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