Answered: If sales increase from R80 000 per year…

If sales increase from R80 000 per year to R120 000 per year, and if the operating leverage is 5, then net income should increase by: A. 167%. B. 100%. C. 334%. D. 250%.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...

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Question

If sales increase from R80 000 per year to R120 000 per year, and if the operating leverage is 5, then net income should increase by:

	A.	167%.
	B.	100%.
	C.	334%.
	D.	250%.

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