If the DOL = 1

question 9

Multiple Choice

If the DOL = 1.05 and OCF rises from $10,000 to $12,500, the percentage change in sales = ?

• A) 18.6%
• B) 19.2%
• C) 22.3%
• D) 23.8%
• E) 26.2%

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Definitions:

Capital Asset

An asset held by an individual or business for investment or personal purposes, excluding inventory or assets sold in the ordinary course of a business.

Rental Property

A property owned by an individual or entity that is rented out to tenants in exchange for monthly rent payments.

Section 1245

A provision in the U.S. tax code that treats the gain from the sale of certain types of property (primarily depreciable personal property) as ordinary income rather than capital gain.

Ordinary Income

Income earned through wages, salaries, commissions, and interest, subject to standard tax rates.