Use the below information to answer the following question. Sales (1,000 units) $ 200,000 Variable costs 110,000 Contribution margin 90,000 Fixed manufacturing costs 40,000 Operating income 50,000 Interest 10,000 Earnings before taxes 40,000 Taxes (30%) 12,000 Net income $ 28,000 Shares Outstanding 1,000 Refer to the table. The degree of financial leverage (DFL) is _____.
Use the below information to answer the following question. Sales (1,000 units) $ 200,000 Variable costs 110,000 Contribution margin 90,000 Fixed manufacturing costs 40,000 Operating income 50,000 Interest 10,000 Earnings before taxes 40,000 Taxes (30%) 12,000 Net income $ 28,000 Shares Outstanding 1,000 Refer to the table. The degree of financial leverage (DFL) is _____.
Chapter14: Capital Structure Management In Practice
Section: Chapter Questions
Problem 6P
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Use the below information to answer the following question.
| Sales (1,000 units) | $ | 200,000 | |
| Variable costs | 110,000 | ||
| Contribution margin | 90,000 | ||
| Fixed |
40,000 | ||
| Operating income | 50,000 | ||
| Interest | 10,000 | ||
| Earnings before taxes | 40,000 | ||
| Taxes (30%) | 12,000 | ||
| Net income | $ | 28,000 | |
| Shares Outstanding | 1,000 | ||
Refer to the table. The degree of financial leverage (DFL) is _____.
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