Question
Aruz Berhad sells its product at RM45 per unit. Fixed cost per year is RM220,000 while variable cost is RM15 per unit. The firm has
Aruz Berhad sells its product at RM45 per unit. Fixed cost per year is RM220,000 while variable cost is RM15 per unit. The firm has debt capital of RM450,000 and its interest rate is 7%. Firm tax rate is 30% and the total number of shares issued is 300,000 units.
You are required to:
- Calculate earnings before interest and tax (EBIT) and earnings per share (EPS) at total sales of 15,000 units.
- Calculate the degree of financial leverage at sales level of 15,000 units.
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School Finance A Policy Perspective
Authors: Allan Odden, Lawrence Picus
5th Edition
0078110289, 978-0078110283
