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Integrative-Leverage and risk Firm R has sales of 97,000 units at $2.03 per unit, variable operating costs of $1.67 per unit, and fixed operating costs

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Integrative-Leverage and risk Firm R has sales of 97,000 units at $2.03 per unit, variable operating costs of $1.67 per unit, and fixed operating costs of $6,070. nterest is $10,080 per year. Firm W has sales of 97,000 units at $2.56 per unit, variable operating costs of $0.97 per unit, and fixed operating costs of $62,400 Interest is $17,200 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. a. The degree of operating leverage for firm R is(Round to two decimal places.) The degree of financial leverage for fim R is (Round to two decimal places.) The total leverage for firm R is(Round to two decimal places.) b. The degree of operating leverage for firm Wis(Round to two decimal places) The degree of financial leverage for firm W is (Round to two decimal places.) The total leverage for firm W is.(Round to two decimal places.) Firmhas less operating (business) risk but more financial risk than firm d. Discuss the principles of leverage that your answers illustrate. (Select all the choices that apply.) A. Two firms with differing operating and financial structures will always be leveraged differently. B. Two firms with differing operating and financial structures may be equally leveraged C. Since total leverage is the sum of operating and financial leverage, each firm may structure itself differently and still have the same amount of total risk. D. Since total leverage is the product of operating and financial leverage, each firm may structure itself differently and still have the same amount of total risk

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