Calculate degrees of financial leverage-operating leverage

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The Last Gasp Water Company sells water by the gallon for a price of $0.75. Fixed coasts for the company are $200,000 , and variable coasts are $0.40 per gallon . the company already has $2,000,000 of 10% bonds on its balance sheet. Calculate the degrees of financial leverage , operating leverage, and composite leverage at 3,000,000 and 7,000,000 gallons sale, interpret the results, and prove that the results are accurate. The company pays normal tax rate for corporations.

Reference no: EM13914670

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Calculate degrees of financial leverage-operating leverage : The Last Gasp Water Company sells water by the gallon for a price of $0.75. Fixed coasts for the company are $200,000 , and variable coasts are $0.40 per gallon . the company already has $2,000,000 of 10% bonds on its balance sheet. Calculate the deg..

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