Question

Bendel Inc. has an operating leverage of 4.3. If the company's sales increase by 15%, its net operating income should increase by about:

Answer 1

64.5%

Step-by-step explanation:

The requirements of this question is to calculate increase in net operating income.

Increase = 15 percent

Operating leverage = 4.3

increase in net operating income.

Operating leverage x sales increase

= 15 x 4.3

= 64.5%

I hope this answer is helpful.