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The following data are available for X Company: •                 Ave Selling price of 16 per unit •                 Variable cost per unit of 11 •                 Units sold is 200,000 •                 Fixed cost is 800,000 •                 Interest expense is 50,000 What is the DFL (Degree of Financial Leverage)?   • 2.50 times • 2.33 times • 5 times • 1.33 times

The following data are available for X Company: •                 Ave Selling price of 16 per unit •                 Variable cost per unit of 11 •                 Units sold is 200,000 •                 Fixed cost is 800,000 •                 Interest expense is 50,000 What is the DFL (Degree of Financial Leverage)?   • 2.50 times • 2.33 times • 5 times • 1.33 times

FINANCIAL ACCOUNTING
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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The following data are available for X Company:

•                 Ave Selling price of 16 per unit

•                 Variable cost per unit of 11

•                 Units sold is 200,000

•                 Fixed cost is 800,000

•                 Interest expense is 50,000

What is the DFL (Degree of Financial Leverage)?

 

• 2.50 times
• 2.33 times
• 5 times
• 1.33 times
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