Question
9. Given the following financial data for Boston Technology, Assume a marginal tax rate of 40%. a. Compute and discuss the degree of operating and
9. Given the following financial data for Boston Technology, Assume a marginal tax rate of 40%.
a. Compute and discuss the degree of operating and financial leverage.
b. Compute and discuss the firms degree of combined leverage.
b. What happens to EPS if sales increase by 15%? 8% decrease? Compare and discuss the two.
|
| 2010 | 2011 | |
| Sales |
| $700,000 | $760,000 |
| Fixed costs |
| 175,000 | 190,000 |
| Variable costs |
| 406,000 | 448,000 |
| EBIT |
| 119,000 | 122,000 |
| Interest |
| 42,000 | 46,000 |
| Shares outstanding |
| 100,000 | 102,000 |
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N. Hyman
9th Edition
0324537190, 9780324537192
