The sterling tire companyrsquos income statement for 20x1, Ask an Expert

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The Sterling Tire Company’s income statement for 20X1 is as follows: STERLING TIRE COMPANY Income Statement For the Year Ended December 31, 20X1 Sales (20,000 tires at $60 each)$1,200,000 Less: Variable costs (20,000 tires at $30)600,000 Fixed costs 400,000Earnings before interest and taxes (EBIT)$ 200,000 Interest expense 50,000Earnings before taxes (EBT)$ 150,000Income tax expense (30%) 45,000Earnings after taxes (EAT)$ 105,000 Given this income statement, compute the following: a. Degree of operating leverage. b. Degree of financial leverage. c. Degree of combined leverage. d. Break-even point in units.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92420765

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