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Sales (10,500 skates @ $60 each)                     $    630,000 
     Less: Variable costs (10,500 skates at $25)         262,500 
              Fixed costs         200,000 
    
  Earnings before interest and taxes (EBIT)              167,500 
  Interest expense                                                62,500 
     
  Earnings before taxes (EBT)                                105,000 
  Income tax expense (30%)                                   31,500 
       Earnings after taxes (EAT)                         $     73,500 
 
Enter only numeric value rounded to 2 decimal places.
(a) find out the degree of operating leverage.
(b) find out the degree of financial leverage.
(c) find out the degree of combined leverage.
(d) Compute the break-even point in units (number of skates).

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  • Category:- Corporate Finance
  • Reference No.:- M91154

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