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Problem:

At an output level of 17,000 units, you have calculated that the degree of operating leverage is 2.00. The operating cash flow is $33,800 in this case.

Ignoring the effect of taxes;

Required:

Question 1: What are fixed costs?

Question 2: What will the operating cash flow be if output increases to 18,000 units?

Question 3: What will the operating cash flow be if output falls to 16,000 units?

Note: Please show how you came up with the solution.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91174643

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