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DeSoto Tools, Inc. is planning to expand production. The expansion will cost $ 3 0 0 , 0 0 0 , which can either be
DeSoto Tools, Inc. is planning to expand production. The expansion will cost $ which can either be financed by bonds at an interest rate of percent or by selling shares of common stock at $ per share. The current income statement before expansion is as follows: After the expansion, sales are expected to increase by $ Variable costs will remain at percent of sales, and fixed costs will increase to $ The tax rate is percent. a Calculate the DOL, the DFL and the DCL before expansion. Do not round the intermediate calculations. Round the final answers to decimal places. tableDOL
DeSoto Tools, Inc. is planning to expand production. The expansion will cost $ which can either be financed by bonds at an interest rate of percent or by selling shares of common stock at $ per share. The current income statement before expansion is as follows:
After the expansion, sales are expected to increase by $ Variable costs will remain at percent of sales, and fixed costs will increase to $ The tax rate is percent.
a Calculate the DOL, the DFL and the DCL before expansion. Do not round the intermediate calculations. Round the final answers to decimal places.
tableDOL
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