problem: A company has sales of 10 million dollar, variable costs of $5 million, EBIT of $2 million, & a degree of combined leverage of 3.0.
[A] If the company has no preferred stock, find out its annual interest charges?
[B] If the company wishes to lower its degree of combined leverage to 2.5 by decreasing interest charges, find out the new level of annual interest charges be?