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