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For a Firm with a DOL of 3

Question 67

Multiple Choice

For a firm with a DOL of 3.5, an increase in sales of 6 percent will:


A) increase pretax profits by 3.5 percent.
B) decrease pretax profits by 3.5 percent.
C) increase pretax profits by 21.0 percent.
D) increase pretax profits by 1.71 percent.

Correct Answer:

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