Sara Lee Has Noted That Every Time the Sales Quantity

Multiple Choice

Sara Lee has noted that every time the sales quantity increases by 5 percent for a particular project, the operating cash flow for the project increases by 8 percent. What is the degree of operating
Leverage for this project if the contribution margin is $2.50?

A) .40
B) .63
C) .71
D) 1.40
E) 1.60