1. A firm's details are as under: Sales (@100 per unit)Rs. 24,00,000 Variable Cost50% of sale Fixed...
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Question:
1.A firm's details are as under:
Sales (@100 per unit)Rs. 24,00,000
Variable Cost50% of sale
Fixed CostRs. 10,00,000
It has borrowed Rs. 10,00,000 @ 10% p.a. and its equity share capital is Rs. 10,00,000 (Rs. 100 each)
Calculate:
(a)Degree of Operating Leverage
(b)Degree of Financial Leverage
(c)Degree of Combined Leverage
(d) If the sales increases by Rs. 6,00,000; what will the new EBIT?
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