A broker is selling an apartment complex and puts together a prospectus which shows a 12% yield. In the prospectus, the broker shows the correct gross scheduled income, but fails to show a vacancy and bad debt deduction. He also fails to include management, maintenance and several other operating expenses. The buyer buys the property based on the income analysis given to him by the broker. The broker is guilty of:

Engberg company installs lawn sod in home yards. the company’s most recent monthly contribution format income statement follows: amount percent of sales sales $ 80,000 100% variable expenses 32,000 40% contribution margin 48,000 60% fixed expenses 38,000 net operating income $ 10,000 required: 1. compute the company’s degree of operating leverage. (round your answer to 1 decimal place.) 2. using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales. (do not round intermediate calculations.) 3. construct a new contribution format income statement for the company assuming a 5% increase in sales.