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2. For a business firm leverage is about the fixed operating cost and the fixed finance costs in the cost structure of the firm. For

2. For a business firm leverage is about the fixed operating cost and the fixed finance costs in the cost structure of the firm. For the given details, identify for which firm the degree of operating leverage and degree of financial leverage are higher and why so: (10 Marks) Firms Amrit Baayu Sales (Rs.) Variable cost p.u Fixed cost (Rs.) Output (units) Interest 3,60,000 20 72,000 6,000 40,000 7,50,000 150 1,40,000 1,500 80,000

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