Question
1. Maverick Technologies has sales of $3,000,000. The companys fixed operating costs total $466,727 and its variable costs equal 60% of sales. The companys interest
1. Maverick Technologies has sales of $3,000,000. The companys fixed operating costs total $466,727 and its variable costs equal 60% of sales. The companys interest expense is $500,000. What is the companys degree of total leverage (DTL)?
2. Maverick Technologies has sales of $3,000,000. The companys fixed operating costs total $500,000 and its variable costs equal 60% of sales, so the companys current operating income is $700,000. The companys interest expense is $580,990. What is the companys degree of financial leverage (DFL)?
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Introduction To Derivatives And Risk Management
Authors: Robert Brooks, Don M Chance, Roberts Brooks
8th Edition
0324601212, 9780324601213
