Question
Given the following information for Computech, compute the firm's degree of combined leverage (dollars are in thousands except EPS). Round your answer to one decimal
Given the following information for Computech, compute the firm's degree of combined leverage (dollars are in thousands except EPS). Round your answer to one decimal place.
Year 1Year 2
Sales$700,000$784,000
Fixed costs120,000120,000
Variable costs200,000224,000
Earnings before interest and taxes$380,000$440,000
Interest40,00040,000
Earnings per share (EPS)$5.10$6.00
Degree of combined leverage:
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International Financial Management
Authors: Cheol Eun, Bruce G. Resnick
8th edition
125971778X, 978-1259717789
