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1) . Compute the degree of operating leverage. (Round your answer to 2 decimal places.) 2). Compute the degree of financial leverage 3)Compute the degree
1). Compute the degree of operating leverage. (Round your answer to 2 decimal places.) 2). Compute the degree of financial leverage
3)Compute the degree of combined leverage. (Round your answer to 2 decimal places.) 4)Compute the break-even point in units. (Round your answer to the nearest whole number.)
The Sterling Tire Company's income statement for 20X1 is as follows: STERLING TIRE COMPANY Income Statement For the Year Ended December 31, 20X1 Sales (21,000 tires at $62 each) Variable costs (21,000 tires at $31) Fixed costs Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Income tax expense (20%) Earnings after taxes (EAT) $ 1,302,000 651,000 410,000 $ 241,000 50,500 $ 190,500 38,100 $ 152,400Step by Step Solution
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