In its first year of operations, a firm had P50,000 of fixed operating costs. it sold 10,000 units at a P10 unit price and incurred variable costs of P4 per unit. If all prices and costs will be the...

1.5 and 18% is the suggested answer. I just need an explanation why it come up like that. Thank you


Extracted text: In its first year of operations, a firm had P50,000 of fixed operating costs. it sold 10,000 units at a P10 unit price and incurred variable costs of P4 per unit. If all prices and costs will be the same in the second year and sales are projected to rise to 25,000 units, what will the degree of operating leverage (the extent to which fixed costs are used in the firm's operations) be in the second year? A. 1.5 В. 3.0 С. 6.0 D. 1.2* Calculate the required rate of return for Apolio, Inc., assuming that investors expect a 5 percent rate of inflation rate in the future. The real risk-free rate is equal to 3 percent and the market risk premium is 5 percent. Apoilo has a beta of 2.0 percent, and its realized rate of return has averaged 15 percent over the last 5 years. A. 15% B. 16% C. 17% D. 18%*