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JTSD Inc., sells 500,000 bottles of its soft drinks per year. Each bottle has a variable cost of $0.25 and sells for $0.45. Fixed operating
JTSD Inc., sells 500,000 bottles of its soft drinks per year. Each bottle has a variable cost of $0.25 and sells for $0.45. Fixed operating costs are $50,000. The firm also has current interest changes of $6,000 and preferred dividends of $2,400. While, corporate taxes are at 25%. Your are required to: 1. Calculate the degree of a) operating leverage b) financial leverage c) total leverage 2. Recalculate them for 250,000 bottles per year What you observe from your findings)
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