OceanGate sells external hard drives for $116 each. Its total fixed costs are $21 million,...
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OceanGate sells external hard drives for $116 each. Its total fixed costs are $21 million, and its variable costs per unit are $81. The corporate tax rate is 49%. If the economy is strong, the firm will sell 4 million drives, but if there is a recession, it will sell only half as many. a. What will be the percentage decline in sales if the economy enters a recession? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Percentage decline in sales b. What will be the percentage decline in profits if the economy enters a recession? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Percentage decline in profits c. Calculate the operating leverage of this firm? (Round your answer to 2 decimal places.) DOL
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