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CFA Level 1
Corporate Finance

Degree of Operating Leverage Calculation

Hard Measures Of Leverage Operating Leverage

XYZ Corp is analyzing its cost structure in order to understand its operating leverage. The company has fixed costs of $200,000 and variable costs that amount to 40% of sales. Last year, XYZ Corp achieved sales of $500,000. Given this information, what is the firm's degree of operating leverage (DOL) at a sales level of $500,000?

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