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the sterling tire company The Sterling Tire Company's income statement for 20X1 is as follows: STERLING TIRE COMPANY Income Statement For the Year Ended December
the sterling tire company The Sterling Tire Company's income statement for 20X1 is as follows: STERLING TIRE COMPANY Income Statement For the Year Ended December 31, 20X1 Sales (25,000 tires at $70 each) $1,750,000 Variable costs (25,000 tires at $35) 875,000 Fixed costs 450,000 Earnings before interest and taxes (EBIT) $ 425,000 Interest expense 52,500 Earnings before taxes (EBT) $ 372,500 Income tax expense (25%) 93,125 Earnings after taxes (EAT) $ 279,375 a. Compute the degree of operating leverage. (Round your answer to 2 decimal places.) Degree of operating leverage b. Compute the degree of financial leverage. (Round your answer to 2 decimal places.) Degree of financial leverage c. Compute the degree of combined leverage. (Round your answer to 2 decimal places.) Degree of combined leverage d. Compute the break-even point in units. (Round your answer to the nearest whole number.) Break-oven point units
the sterling tire company
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