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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
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