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A company has a sales of . 2 , 0 0 , 0 0 0 . The variable costs are 4 0 per cent of

A company has a sales of .2,00,000. The variable costs are 40 per cent of the sales and fixed expenses are .60,000. The interest on borrowed capital is assumed to be .20,000. Compute the combined leverage and show the impact on taxable income when sales increases by 10 per cent.

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