Compute and discuss the degree of operating and financial


Given the following financial data for B Technology, Assume a marginal tax rate of 40%. a. Compute and discuss the degree of operating and financial leverage. b. Compute and discuss the firm’s degree of combined leverage. b. What happens to EPS if sales increase by 15%? 8% decrease? Compare and discuss the two. 2010 2011 Sales $700,000 $760,000 Fixed costs 175,000 190,000 Variable costs 406,000 448,000 EBIT 119,000 122,000 Interest 42,000 46,000 Shares outstanding 100,000 102,000.

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Financial Management: Compute and discuss the degree of operating and financial
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