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The Sterling Tire Company's income statement for 20XX is as follows: STERLING TIRE COMPANY Income Statement Year ended December 11, 20XX Sales (20.000 tires at

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The Sterling Tire Company's income statement for 20XX is as follows: STERLING TIRE COMPANY Income Statement Year ended December 11, 20XX Sales (20.000 tires at 150 each) Lost Variable costs (20.000 tires at 555) 11,000,000 1.100.000 50.000 300,000 Contribution margin LESS: Bixed costs Larnings before interest and taxes (EBIT) Interest expense 200,000 75,000 Earnings before taxes (ET) Income tax expense (30) 125.000 37.500 Earnings after taxes (LAT Given this income statement, compute the following: a. Degree of operating leverage. (Round the final answer to 2 decimal places.) DOL X X b. Degree of financial leverage. (Round the final answer to 2 decimal places) DFL 1. Degree of combined leverage. (Do not round the Intermediate calculations. Round the final answer to 2 decimal places.) DCL X c-2. Using your answers to a. and b. calculate the percentage increase in EBIT and EBT from a 20 percent increase in sales volume. (Do not round the Intermediate calculations. Round the final answers to 2 decimal places.) 23. Does financial or operating leverage have the greater impact? O DFL ODOL d. Break-even point in units. (Round the final answer to the nearest whole number) Breek even point tires e. Break-even point considering the interest expense os a fixed cost. Break-even point tires

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