If sales increase from $80,000 per year to $120,000 per year, and if the operating leverage is 5, then net income should increase by?

A) 167%.
B) 250%.
C) 334%.
D) 100%.

Operating Leverage

Operating leverage is a measure of how revenue growth translates into growth in operating income, indicating the degree to which a company can increase profitability through its fixed costs structure.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Sales

The total revenue generated from goods or services sold by a company.