IS-2B. (Leverage analysis) New Wave Pharmaceuticals (see description and data in Problem IS-IB) is concerned that recent unfavorable publicity about the questionable medicinal benefits of other vitamins will temporarily hurt NWP's sales even though such assertions do not apply to

~1WPS vitamin. Accordingly, Roberto has been asked to deternune the company's level of risk based on the financial information for the year just ended. In addition to the data described in Problem IS-IB, Roberto learned from the company's financial statements that the company incurred 5800,000 of interest ~xpense in the year just ended. What will Roberto detem1ine the

(a) degree of operating leverage,

(b) degree of financial leverage, and

(c) degTee of combined leverage to be?