Question
Company A has $100 million in sales for 2020. Its total costs are 40% of sales. These total costs are 20% fixed and 80% variable.
Company A has $100 million in sales for 2020. Its total costs are 40% of sales. These total costs are 20% fixed and 80% variable. The company has also borrowed $50 million at 10% interest and is in the 20% tax bracket.
1: Calculate the DOL, DFL, and DCL for Company A.
2: Why is it impossible to calculate the breakeven point given the above data?
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Corporate Finance For Dummies
Authors: Michael Taillard
2nd Edition
1119850312, 978-1119850311
