Solution-Explain the degree of combined leverage

Explain the degree of combined leverage

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Reference no: EM133205094

Given the following information for Computech, compute the firm's degree of combined leverage (dollars are in thousands except EPS). Round your answer to one decimal place.

	Year 1	Year 2
Sales	$550,000	$621,500
Fixed costs	110,000	110,000
Variable costs	200,000	226,000
Earnings before interest and taxes	$240,000	$285,500
Interest	25,000	25,000
Earnings per share (EPS)	$4.30	$5.21

Degree of combined leverage:

Reference no: EM133205094

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Explain the degree of combined leverage

Reference no: EM133205094

Reference no: EM133205094

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