Asked by
Makaila Glaster-Brown
on Dec 09, 2024
Verified
Webster and Words manage a product with a 3.5 degree of operating leverage. Sales of the product are expected to decline by 15 percent next year. What is the expected change in the operating cash flow for this product for next year?
A) increase by 23.3 percent
B) increase by 52.5 percent
C) decrease by 4.3 percent
D) decrease by 23.3 percent
E) decrease by 52.5 percent
Operating Cash Flow
The cash generated from the normal operations of a business, excluding capital expenditures and investment revenue.
Sales
The total amount of goods or services sold by a company within a specific time period, reflecting its primary source of revenue.
- Interpret the degree of operating leverage and its impact on business financial performance.
Verified Answer
SA
Learning Objectives
- Interpret the degree of operating leverage and its impact on business financial performance.