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27 September, 11:48

Sperberg Corporation's operating leverage is 5.2. If the company's sales increase by 10%, its net operating income should increase by а bout:

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  1. 27 September, 11:52
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    net operating income that is increase by 52%

    Explanation:

    given data

    operating leverage = 5.2

    sales increase = 10%

    solution

    we get here net operating income that is increase by as

    percentage of increase net operating income = operating leverage * sales increase ... 1

    put here value we get

    percentage of increase net operating income = 5.2 * 10%

    percentage of increase net operating income = 52%
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