Based on the below data, compute for the Degree of Financial Leverage: Sales 100,000,000 Variable Cost 40,000,000 Fixed Cost 40,000,000 Capital employed of the company 80,000,000 Debts (carries 10% interest) 40,000,000

Based on the below data, compute for the Degree of Financial Leverage: Sales 100,000,000 Variable Cost 40,000,000 Fixed Cost 40,000,000 Capital employed of the company 80,000,000 Debts (carries 10% interest) 40,000,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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Based on the below data, compute for the Degree of Financial Leverage:

Sales 100,000,000

Variable Cost 40,000,000

Fixed Cost 40,000,000

Capital employed of the company 80,000,000

Debts (carries 10% interest) 40,000,000

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