Exam II Part II Managing Finance & Capital: Ch 5,6,7.& 8 Problems: Name: SHOW ALL CALCULATIONS TO RECEIVE CREDIT 1. The Harding Company manufactures skates. The company's income statement for 20X1 is as follows: Harding COMPANY Income Statement For the Year Ended December 31, 20X1 Sales (10,500 skates @ $70 each). $735,000 Less: Variable costs (10,500 skates at $25). 262,500 Fixed costs... 200.000 Eamings before interest and taxes (EBIT). 272,500 Interest expense 62,500 Earnings before taxes (EBT) 210,000 Income tax expense (30%). 63,000 Earnings after taxes (EAT) $ 147,000 Given this income statement, compute the following: Degree of operating leverage b Degree of financial leverage. Degree of combined leverage, d. Break-even point in units (number of skates). a C