An 8 Year Project Is Estimated to Produce a Product

Multiple Choice

An 8 year project is estimated to produce a product with the following information: selling price = $80 per unit; variable costs are $65 per unit; fixed costs are $20,000; required return is 10%; initial investment = $200,000.Calculate the Degree of operating leverage.

A) 0.83
B) 0.73
C) 0.63
D) 0.53