Multiple Choice
Ralph is in charge of a project that has a degree of operating leverage of 2.5. What will happen to the operating cash flows if Ralph increases the number of units sold by 5 percent?
A) increase by 2 percent
B) increase by 12.5 percent
C) increase by 50 percent
D) decrease by 12.5 percent
E) decrease by 50 percent
Correct Answer:
Verified
Correct Answer:
Verified
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