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ATech has fixed costs of $15 million and profits of $10 million. Its competitor, ZTech,...

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ATech has fixed costs of $15 million and profits of $10 million. Its competitor, ZTech, is roughly the same size and this year earned the same profits, $10 million. But it operates with higher fixed costs of $16 million and lower variable costs. a. What is the degree of operating leverage (DOL) for each company? (Defined here as 1 + Fixed costs/Profit.) (Do not round intermediate calculations. Round your answers to 2 decimal places.) Degree of operating leverage for ATech Degree of operating leverage for ZTech b. Which firm has higher operating leverage? O ATech ZTech c. Which firm will likely have higher profits if the economy strengthens? O ATech O ZTech

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