Integrative-Leverage and risk Firm R has sales of 102,000 units at units at $1.97 per unit, variable operating cost of $1.69 unit, and fixed operating costs of $$6,020. Interest is $10,050 per year. Firm W has sales of 10200 units at $2.53 per unit, variable operating cost of $o.97 per unit, and fixed operating cost of $62,400. Interest is $17,500 per year. Assume that both firms are in the 40% tax bracket.

a, Compute degree of operating leverage, financial, and total leverage from firm R.

b. Compute degree of operating leverage, financial, and total leverage from firm W.

c. Compare the relative risk of the two firms.

d. Discuss the principles of leverage that your answers illustrate.

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a. The degree of operating leverage for firm R is _______. (Round to two decimal places.)

The degree of financial leverage for firm R is ______. (Round to two decimal places.)

The total leverage form firm R ______ . (Round to two decimal places.)

b. The degree of operating leverage for firm W is _______. (Round to two decimal places.)

The degree of financial leverage for firm W is ______. (Round to two decimal places.)

The total leverage form firm W ______ . (Round to two decimal places.)