Consider a four-year project with the following information: initial fixed asset investment = $460,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $28; variable costs = $18; fixed costs = $150,000; quantity sold = 76,000 units; tax rate = 32 percent.
What is the degree of operating leverage at the given level of output?
What is the degree of operating leverage at the accounting break-even level of output?