cost of debt 10%

Problem 17.11. Calculate financial leverage and operating leverage under situations A and B and mancial Plans I and II respectively from the following information relating to the operation and capital structure ABC Ltd. Scanned By Scann Installed capacity Actual Production and sales 1.000 units 800 units Selling price per unit Rs. 20 Variable cost per unit Rs. 15 Fixed costs : Situation A Rs. 800 Situation B Rs. 1,500 Capital Structure: Financial Plan 1 Equity Rs. 5,000 Rs. 7.000 Debt Rs. 5,000 Rs. 2,000 How will various calculations be useful to the Financial Manager of the company