A Project Has the Following Estimated Data: Price = $74

Multiple Choice

A project has the following estimated data: price = $74 per unit; variable costs = $39.22 per unit; fixed costs = $6,500; required return = 8 percent; initial investment = $8,000; life = 4 years.Ignore the effect of taxes.What is the degree of operating leverage at the financial break-even level of output?

A) 2.716
B) 3.691
C) 4.528
D) 6.003
E) 7.337