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The Sterling Tire Company's income statement for 20XX is as follows: Given this income statement, compute the following: a. Degree of operating leverage. (Round the
The Sterling Tire Company's income statement for 20XX is as follows: Given this income statement, compute the following: a. Degree of operating leverage. (Round the final answer to 2 decimal places.) DOLX b. Degree of financial leverage. (Round the final answer to 2 decimal places.) DFL X c-1. Degree of combined leverage. (Do not round the intermediate calculations. Round the final answer to 2 decimal places.) DCLX 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.)
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