The company incurs costs of $24.89 million regardless of the output level. It sells 7.1 million units of its product at the price of $9.07, and its variable costs per unit are $2.1. The company has $42 million of debt with an annual interest rate of 5.31%. What is the degree of combined leverage at the current level of sales? Round to two decimals.
The company incurs costs of $24.89 million regardless of the output level. It sells 7.1 million units of its product at the price of $9.07, and its variable costs per unit are $2.1. The company has $42 million of debt with an annual interest rate of 5.31%. What is the degree of combined leverage at the current level of sales? Round to two decimals.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The company incurs costs of $24.89 million regardless of the output level. It sells 7.1 million units of its product at the price of $9.07, and its variable costs per unit are $2.1. The company has $42 million of debt with an annual interest rate of 5.31%. What is the degree of combined leverage at the current level of sales? Round to two decimals.
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