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The Sterling Tire Company's Income statement for 20xx is as follows: TERENGETI COMMY Te statement Tended Dec 31, JOXX Balea (20,000 tires at 360 s)

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The Sterling Tire Company's Income statement for 20xx is as follows: TERENGETI COMMY Te statement Tended Dec 31, JOXX Balea (20,000 tires at 360 s) $1,200,000 Lossi Variable costs (20,000 tires at 330) 600,000 Contribution margin 600,000 Les Fixed costs 400,000 warnings before Interunt and taxes (BIT) 200.000 Interest expense 50,000 Iarnings before taxes (OT) Income tax expense (341) Earnings after taxes (ET) 150,000 51,000 $ 99,000 Given this income statement, compute the following: DOL a. Degree of operating leverage (Round the final answer to 2 decimal places.) 3.00 b. Degree of financial leverage. (Round the final answer to 2 decimal places) 133) X c-1. Degree of combined leverage (Do not round the intermediate calculations. Round the final answer to 2 decimal place) DFL DCL 400 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.) Book 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.) 60.00 B0.00 c-3. Does financial or operating leverage have the greater impact? DOL DEL d. Break-even point in units. (Round the final answer to the nearest whole number) Break-even point 13333 tires e. Break-even point considering the interest expense as a fixed cost Break-even point tires

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