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Tyreek's Hillbilly Fruit stand sells apples for $ 2 5 a bushel. The fixed costs for Tyreek's are $ 1 1 0 , 0 0
Tyreek's Hillbilly Fruit stand sells apples for $ a bushel. The fixed costs for Tyreek's are
$ while the variable costs are $ per bushel.
a What is the breakeven for Tyreek's?
b Calculate the profit or loss at and bushels.
c What is the degree of operating leverage at and bushels? Why does the
DOL change as quantity sold increases?
d If Tyreek's has annual interest expense of $ calculate the degree of financial
leverage at both and bushels.
e What is the degree of combined leverage at both sales levels?
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