Calculate operating leverage of tax rate, Finance Basics

A firm has sales of Rs. 10,00,000. Variable cost is 70%, total cost is Rs.9,00,000 and Debt of Rs. 5,00,000 at 10% rate of interest. If tax rate is 40% calculate:                                                                                    

(a)   Operating Leverage

(b)   Financial Leverage

(c)    Combined Leverage

(d)   If the firm wants to double up its EBIT, how much of a raise in sales would be needed on a % basis?

 

Posted Date: 3/15/2013 2:27:42 AM | Location : United States







Related Discussions:- Calculate operating leverage of tax rate, Assignment Help, Ask Question on Calculate operating leverage of tax rate, Get Answer, Expert's Help, Calculate operating leverage of tax rate Discussions

Write discussion on Calculate operating leverage of tax rate
Your posts are moderated
Related Questions
'The most significant function of any Central Bank is to undertake monetary control operations'.   Discuss with specific reference to the Bank of England, highlighting its current

The Bim-Bom Company is expected to pay a dividend of $3.10 per share at the end of the year, and that dividend is expected to grow at a constant rate of 4.00% per annum.  The compa

Types of Partners 1. General Partners -Unlimited active and liability in participation in partnership activities. 2. Limited partners - Limited liability in the management of

Accounting Rate of Return Method or ARR This method utilizes accounting profits from financial status to assess the viability of investment proposal via diving the average inc

Determine the Functions of New Issue Market The key function of new issue market is to facilitate transfer resources from savers to the users. Savers are individuals, insura


Prudence buys a bond in EUR when it issued by the French government and inflation linked.  It offers a 2% yearly coupon.  She holds it for five years.             Par value: EUR

Agency Relationship between Government and the Shareholders Shareholders and via extension, the company they own operate within the environment requiring the charter or licens

Interest Rate Levels and Stock Prices Interest rates contain two effects on corporate profits: a) Since interest rate is a cost, and like the higher the rate of interest the

capital structure of 38% common stock and 62% debt. A debt issue of 1000 par value, 5.6% bonds that mature in 15 years and pay annual interest will sell for $979.dividends have gro