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In 2009, Firm X has net income of $182,000, income tax of $80,000, and interest expense of $31,000. Required: a. Compute the degree of financial
In 2009, Firm X has net income of $182,000, income tax of $80,000, and interest expense of $31,000.
Required:
| a. | Compute the degree of financial leverage. |
| b. | In 2010, if earnings before interest and tax increase by 10%, what should be the change in net income? |
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