JMC Corp. wants to double its sales to 1,000,000 bottes next year. Towards that it plans to restructure its capital. It currently is financed entirely by equity of $200,000. It plans to reduce its equity 50% and borrow long-term debt of $200,000 @ 5% interest cost. Calculate the new Degree of Operating Leverage (DOL)

Degree of Operating Leverage

JMC Corp. wants to double its sales to 1,000,000 bottes next year. Towards that it plans to restructure its capital. It currently is financed entirely by equity of $200,000. It plans to reduce its equity 50% and borrow long-term debt of $200,000 @ 5% interest cost.

Calculate the new Degree of Operating Leverage (DOL)