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Integrative--Leverage and risk Firm R has sales of 100,000 units at 197 per unit, variable operating conts of 51.75 per unit, and fixed operating costs

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Integrative--Leverage and risk Firm R has sales of 100,000 units at 197 per unit, variable operating conts of 51.75 per unit, and fixed operating costs of 56.040 Interest is $10,000 per year Firm W has sales of 100,000 units at $253 per unit, variable operating costs of $104 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 firm W c. Compare the relative risks of the two firms d. Discuss the principles of leverage that your answers illustrate

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