Bendel Incorporated has an operating leverage of 5.8. If the company's sales increase by 12%, its net operating income should increase by about:_________

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asked Aug 25, 2021 227k views

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Pfych · Answer 1 · 2021-08-29T01:49:06+0000

Answer:

69.60 %

Step-by-step explanation:

Degree of Operating Leverage shows the times Earnings Before Interest and Tax (EBIT) will change as a result of a change in sales contribution. Increases of sales of 12% will lead to increase in EBITof 69.60 % (12% × 5.8).

Bendel Incorporated has an operating leverage of 5.8. If the company's sales increase by 12%, its net operating income should increase by about:_________

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