Aiman Manufacturing Corporation has RM1,500,000 in debt outstanding. The companys interest on debt is 10%. Sales for the year totalled RM3,500,000 and variable costs were 60% of sales. Net income was equal to RM600,000 and the companys tax rate was 40%. If Aimans degree of combined leverage is equal to 1.4. i. Calculate its degree of operating leverage? (8 marks) ii. What can you conclude from your findings in b(i)?

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