Question BlueTooth Micro Printers Ltd. generates $5 million in profits based on annual sales of $10,872,000. It has a degree of operating leverage of 2.00. What are the expected profits if sales increase to $14,355,000? a. $8,203,642 b. $3,203,642 c. $18,203,642 d. $11,601,821 e. $1,601,821

AO5IF6 The Asker · Finance

BlueTooth Micro Printers Ltd. generates $5 million in profits based on annual sales of $10,872,000. It has a degree of operating leverage of 2.00. What are the expected profits if sales increase to $14,355,000?

a. $8,203,642

b. $3,203,642

c. $18,203,642

d. $11,601,821

e. $1,601,821

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% change in sales=(14,355,000-10,872,000)/10,872,000 =32.0364238% Degree of operating leverage=% change in EBIT/% change in sales % ... See the full answer