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CFA Level 1 Exam

3959 Questions

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Question No. 1

Ace Consulting, a corporate finance consulting firm, is examining the operating performance of Microscam Incorporated. In their analysis, Ace Consulting has identified the following information:
Year 1 interest paid $28,000
Year 2 interest paid $35,000
Year 1 sales $1,675,000
Year 2 sales $1,895,000
Year 1 EBIT $750,000
Year 2 EBIT $987,500
Cost of debt 7.70%
Given this information, what is the Degree of Operating Leverage for this firm during the time period in question?

Choose the correct option from the given list.
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