Unformatted text preview: Problem 2 You estimate that Project Z has fixed cost of $700 per year, depreciation charges of $300 a year, revenue $5,000 a year, and variable costs equal to 70% of revenues. (1) What is the degree of operating leverage (DOL) of this project? (2) If sales turn out to be $5,350, what is the percentage change in sales? (3) When sales are $5,000, EBIT = __________________________________ When sales are $5,350, EBIT = __________________________________ Percentage change in EBIT = ____________________________________...
View Full Document
- Spring '10
- Depreciation, $300, $3 million, break-even level, $1.2 million