=+LG 1 LG 2 P13–17 Integrative: Multiple leverage measures and prediction Profarma shpk, an Albanian pharmaceutical company, makes a patented flu medicine that wholesales for L600.

Each bottle of the medicine has variable operating costs of L400, while fixed costs are L2,000,000 per year. The firm pays L150,000 interest and preferred dividends of L40,000 per year. At this point the firm is selling 11,000 bottles of medicine per year and is taxed at a rate of 15%.