Webster and Words Manage a Product with a 3

Multiple Choice

Webster and Words manage a product with a 3.5 degree of operating leverage. Sales of the product are expected to decline by 15 percent next year. What is the expected change in the
Operating cash flow for this product for next year?

A) increase by 23.3 percent
B) increase by 52.5 percent
C) decrease by 4.3 percent
D) decrease by 23.3 percent
E) decrease by 52.5 percent