Assume that a firm has the following Income Statement.
Use this data to determine the business risk and the financial risk as measured by the degree of operating leverage and the degree of financial leverage, respectively. Also, determine the combined leverage as found with the degree of combined leverage. Utilize these risk measures to see the affect of a change in sales.
December 31, Year 1
Variable Cost ($20/unit)
find out the DOL.
find out the DFL.
Determine the DCL
If sales increased by 20% determine the change in EBIT and the change in EPS.
Please submit your backup in Excel showing how answers were reached. Thank you.