Increase in operating income/net income
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4. How much will a 15% increase in sales increase a firm's net operating income (NOI) and increase its net income (NI), if:
(a) its degree of operating leverage (DOL) = 2.0, and its
(b) degree of financial leverage (DFL) = 3.0? (b) its
(c) DOL = 1.5 and DFL = 2.0?
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Solution Summary
The solution explains how to calculate the increase in operating income and net income given the DOL and DFL
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(a) DOL = 2.0 and DFL = 3.0
The NOI changes by the DOL and the NI changes by Degree of Total ...
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