You estimate that your cattle farm will generate $1 million of profits on sales of $5.5 million under normal economic conditions and that the degree of operating leverage is 8. a. What will profits be if sales turn out to be $4.8 million? (Negative amount should be indicated by a minus sign. Round your answer to 1 decimal place.) Profits will by % b. What if they are $6.2 million? (Round your answer to 1 decimal place.) Profits will by %

You estimate that your cattle farm will generate $1 million of profits on sales of $5.5 million under normal economic conditions and that the degree of operating leverage is 8. a. What will profits be if sales turn out to be $4.8 million? (Negative amount should be indicated by a minus sign. Round your answer to 1 decimal place.) Profits will by % b. What if they are $6.2 million? (Round your answer to 1 decimal place.) Profits will by %

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4A: Nopat Breakeven: Revenues Needed To Cover Total Operating Costs

Section: Chapter Questions

Problem 1EP

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