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The Sterling Tire Company's income statement for 20XX is as follows: STERLING TIRE COMPANY Income Statement Year ended December 31, 20XX Sales (30,000 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 31, 20XX Sales (30,000 tires at $45 each) Less: Variable costs (30,000 tires at $30) $ 1,350,000 900,000 Contribution margin Less: Fixed costs 450,000 300,000 Earnings before interest and taxes (EBIT) Interest expense 150,000 60,000 Earnings before taxes (EBT) Income tax expense (35%) 90,000 31,500 Earnings after taxes (EAT) $ 58,500 w Given this income statement, compute the following a. Degree of operating leverage (Round the final answer to 2 decimal places.) DOL X b. Degree of financial leverage (Round the final answer to 2 decimal places.)

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