Grayson Corp. has sales of $385,000, variable costs are 68% of sales, and operating income is $55,000. What is the operating leverage? (a) 2.250 (b) 2.136 (c) 2.500 (d) 2.318
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- 3. Cerry Technologies has sales of $4,000,000. The company's fixed operating costs total $700,000 and its variable costs equal 60 percent of sales, so the company's current operating income is $900,000. The company's interest expense is $300,000. What is the company's degree of total operating leverage? What is the company's degree financial leverage?Qantas Industries has fixed costs of $250,000 and profit of $125,000. What is its degree of operating leverage? a. 1.5 b. 3 c. 2 d. 2.5If financial leverage of a firm is 4, Interest 6,00,000, Operating Leverage is 3, Variable cost to sales is 66.66%, Income tax rate is 30%, Number of Equity Shares 1, 00, 000. Calculate fixed cost and EPS of the firms. (For your reference, OL = Contribution/EBIT; FL = EBIT/EBT and CL = OL*FL)
