### Computation of eps

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Computation of EPS

The company expects sales if silicon chips to be\$60 million this year Because this is a very capital intensive business fixed operating cost are\$20 million the variable cost ratio is 40% the firm's debt obligations consist of a\$4 million 10% bank loan and a\$2 million bond issue with a 11 % coupon rate. The company has 1 million shares of common stock outstanding and its marginal tax rate is 40%. I need to compute the degree if operating leverage and financial leverage and the combined leverage. Compute EPS if sales is declined by 5%.

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