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You are the CFO of the firm in problem 4. Determine the Degree of Operating Leverage, the Degree of Financial Leverage, the Total Degree of

  1. You are the CFO of the firm in problem 4. Determine the Degree of Operating Leverage, the Degree of Financial Leverage, the Total Degree of Leverage of your firm, assuming that Sales are $400 million, Fixed Costs are $150 million and Variable Costs are 30% of Sales. Determine the expected percentage change in earnings if Sales increase by 25%. (8 points)

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