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 $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)?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter16: Financial Planning And Control

Section: Chapter Questions

Problem 19PROB

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