The Accounting Manager of Gateway Inns Has Noted That Every

question 93

Multiple Choice

The accounting manager of Gateway Inns has noted that every time the inn's average occupancy rate increases by 3.3 percent, the operating cash flow increases by 4.6 percent. What is the degree of operating leverage if the contribution margin per unit is $47?

• A) .72
• B) .85
• C) 1.75
• D) 1.18
• E) 1.39

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