The following data is available for XYZ Ltd.

SalesRs.2, 00,000

-variable cost60,000

Contribution1, 40,000

Fixed cost1, 00,000

EBIT40,000

-Interest5,000

PBT35,000

Find out:

(i) Using the concept of financial leverage, by what % will the taxable income increase if EBIT increases by 6%.

(ii) Using the concept of operating leverage, by what % will the EBIT increase if there is 10% increase in sales, and

(iii) Using the concept of combined leverage by what % will the taxable income increase if the sales increase by 6%.