1 The net operating income (EBIT) for Bear Investment Company (BIC) this year is $80,000 During the year, the company paid $20,000 in interest on its debt and $25,000 in dividends to its common stockholders If BICs marginal tax rate is 40 percent, what is the companys DFL 2 Pike Corporation sells its product, which has a variable cost equal to $21 per unit, for $25 per unit Fixed operating costs are $180,000 To support operations, the firm requires $500,000 in debt, which has a cost (rd) of 10 percent The tax rate is irrelevant The sales forecast for the coming year is 70,000 units Compute Pikes DOL, DFL, and DTL Explain the results

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1  The net operating income (EBIT) for Bear Investment Company (BIC) this year is $80,000  During the year, the company paid $20,000 in interest on its debt and $25,000 in dividends to its common stockholders  If BICs marginal tax rate is 40 percent, what is the companys DFL  2  Pike Corporation sells its product, which has a variable cost equal to $21 per unit, for $25 per unit  Fixed operating costs are $180,000  To support operations, the firm requires $500,000 in debt, which has a cost (rd) of 10 percent  The tax rate is irrelevant  The sales forecast for the coming year is 70,000 units  Compute Pikes DOL, DFL, and DTL  Explain the results

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1. The net operating income (EBIT) for Bear Investment Company (BIC) this year is $80,000. During the year, the company paid $20,000 in interest on

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