12-17

tax bracket a. Compure the degree of operating, financial, and total leverage for age for firm w c. Compare the relative risks of the rwo firms. d. Discuss the principles of leverage that your answers illustrate. b. Compute the degree of operating, financial, and total lever a patented marine bulkhead latch that wholesales for $6.00. Each lath operating costs of $3.50. Fixed operating costs are $50,000 per year. The $13,000 interest and preferred dividends of $7,000 per year. At this poin is selling 30,000 latches per year and is taxed at a rate of 21 %. a. Calculate Carolina Fastener's operating breakeven point. b. On the basis of the firm's current sales of 30,000 units per year P12-17 Integrative: Multiple leverage measures and prediction Carolina and preferred dividend costs, calculate its EBIT and earnings available common, c. Calculate the firm's degree of operating leverage (DOL). d. Calculate the firm's degree of financial leverage (DFL). e. Calculate the firm's degree of total leverage (DTL). f. Carolina Fastener has entered into a contract to produce and sell an addition 15,000 latches in the coming year. Use the DOL, DFL, and DTL to predict ad calculate the changes in EBIT and earnings available for common. Check your work by a simple calculation of Carolina Fastener's EBIT and earnings avali for common, using the basic information given. Personal Finance Problem 12-18 CapitalcL