Degree of combined leverage


Firms in Japan often employ high operating and financial leverage because of the use of modern technology and close borrower-lender relationships. Assume the Susaki Comapny has a sales volume of 100,000 units at a price of $25 per unit; variable costs are $5 per unit and fixed costs are $1,500,000. Interest expense is $250,000. What is the degree of combined leverage for this Japanese firm?

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Business Management: Degree of combined leverage
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