Bendel Incorporated has an operating leverage of 5.9. If the company's sales increase by 10%, its net operating income should increase by about:

A) 59.0%
B) 1.7%
C) 10.0%
D) 47.4%

Operating Leverage

A measure of how revenue growth translates into growth in operating income, determined by the proportion of fixed costs in a company's cost structure.

Sales Increase

The rise in the volume or amount of sales over a specific period, reflecting business growth.

Net Operating Income

The profit generated from a company's core business operations after deducting all operating expenses except for interest and taxes.