Bulldogs Inc. has sales of P4,500,000, variable costs equal 75% of sales, and a fixed interest costs of P750,000. The current operating income of the firm is P1,050,000. What is the degree of combined leverage? a. 5.85 b. 3.75 c. 4.25 d. 4.05
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- If a firm has a contribution margin of $78M90 and a net income of $13,700 for the current month, what is their degree of operating leverage? 0.21 1.21 2.4 5.7If a firm has a contribution margin of $59,690 and a net income of $12,700 for the current month, what is their degree of operating leverage? A. 0.18 B. 1.18 C. 2.4 D. 4.7Bulldogs Inc. has sales of P4,500,000, variable costs equal 75% of sales, and a fixed interest costs of P750,000. The current operating income of the firm is P1,050,000. What is the degree of combined leverage?
- Maverick Technologies has sales of $3,000,000. The company’s fixed operating costs total $500,000 and its variable costs equal 60% of sales, so the company’s current operating income is $700,000. The company’s interest expense is $492,284. What is the company’s degree of financial leverage (DFL)?Maverick Technologies has sales of $ 3,000,000. The company's fixed operating costs total $548, 438 and its variable costs equal 60% of sales. The company's interest expense is $ 500,000. What is the company's degree of total leverage (DTL)? Answer to 2 decimal places.Peterson Manufacturing is evaluating two different operating structures which are described below. The firm has annual interest expense of $250, common shares outstanding of 1,000, and a tax rate of 40 percent. Fixed Cost Price per unit Variable cost per unit Operating Structure 1 $500 $1 $0.75 Operating Structure 2 $1200 $1 $0.70 1. For each operating structure, calculate x. EBIT and EPS at 10,000, 20,000, and 30,000 units. y. the degree of operating leverage (DOL) and degree of total leverage (DTL) using 20,000 units as a base sales level. z. the operating breakeven point in units. 2. Which operating structure has greater operating leverage and business risk? 3. If Peterson projects sales of 20,000 units, which operating structure is recommended?
- Maverick Technologies has sales of $3,000,000. The company’s fixed operating costs total $543,418 and its variable costs equal 60% of sales. The company’s interest expense is $500,000. What is the company’s degree of total leverage (DTL)?Firm R has sales of 100,000 units at $2 per unit, variable operating costs of $1.70 per unit, and fixed operating costs of $6,000. Interest is $10,000 per year. Firm W has sales of 100,000 units at $2.50 per unit, variable operating costs of $1.00 per unit, and fixed operating costs of $62,500. Interest is $17,500 per year. Assume that both firms are in the 40% tax bracket. Compute the degree of operating, financial and total leverage for firm R. Compute the degree of operating, financial and total leverage for firm W. Compare the relative risks of the two firms.Given the following information for Computech, compute the firm’s degree of combined leverage (dollars are in thousands except EPS). Round your answer to one decimal place. Year 1 Year 2 Sales $550,000 $621,500 Fixed costs 110,000 110,000 Variable costs 200,000 226,000 Earnings before interest and taxes $240,000 $285,500 Interest 25,000 25,000 Earnings per share (EPS) $4.30 $5.21 Degree of combined leverage:
- LPM Corporation sells its product for $10 each. Fixed operating costs equal $100,000, and variable operating costs are 75 percent of the selling price. The firm pays $37,500 in interest, and its marginal tax rate is 35 percent. (a) What are LPM’s operating breakeven point and financial breakeven point? (b) If LPM expects to sell 65,000 units, what are its degree of operating leverage (DOL), degree of financial leverage (DFL), and degree of total leverage (DTL)? The firm has no preferred stockA company has an operating leverage factor of 4. When its sale increased to Php 500,000.00, its profit before tax increased by 100%. its variable cost ratio is 40%, How much is the company's fixed costs?A firm has sales of Rs.5, 00,000, variable cost Rs. 3, 50,000 and fixed cost Rs.1, 00,000 and debt of Rs.2,50,000 at 10 per cent interest. Calculate the operating, financial and combined leverage.
