TR Industries Manage a Product with a 2

Multiple Choice

TR Industries manage a product with a 2.6 degree of operating leverage. Sales of the product are expected to decline by 8 percent next year as an economic downturn is anticipated. What is the expected change in the operating cash flow for this product for next year?

A) -20.8 percent
B) -5.4 percent
C) 5.4 percent
D) 10.8 percent
E) 20.8 percent