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One of your clients is considering the possibility of investing into one of two companies. Boyz'R'Us or Gurlz'R' US. You have already prepared CVP income
One of your clients is considering the possibility of investing into one of two companies. Boyz'R'Us or Gurlz'R' US. You have already prepared CVP income statements for both companies. The statements are as follows: Compute dollar break-even and the margin of safety for BOTH companies. (show your work) Define the term degree of operating leverage and compute it for BOTH companies. (show your work) What is your interpretation of the results? Explain For both companies, prepare a CVP income statement assuming that the sales increased 20% or decreased 20% Based on #3. Discuss how the companies' cost structure affects their operating leverage and profitability
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