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Integrative-Leverage and risk Firm has sales of 104.000 units at $2.05 per unit, variable operating costs of $1.71 per unit, and fixed operating costs of
Integrative-Leverage and risk Firm has sales of 104.000 units at $2.05 per unit, variable operating costs of $1.71 per unit, and fixed operating costs of $6,000 Interest is $10.080 per year Firm Whas sales of 104 000 units at $2.56 per unit, variable operating costs of $0.98 per unit, and fixed operating costs of $62,800 Interest is $17.900 per year. Assume that both firms are in the 40% tax bracket a. Compute the degree of operating, financial, and total leverage for firm R. b. Compute the degree of operating, financial, and total leverage for fim W. c. Compare the relative risks of the two firme d. Discuss the principles of leverage that your answers ilustrate a. The degree of aperating leverage for firm Ris (Round to two decimal places) Enter your answer in the answer box and then click Check Answer 7 parts remaining Clear All Check
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