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What impact will a percent decrease in sales

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Problem - Beachcomber Treasures has determined that its degree of operating leverage (DOL) is 3.5 and its degree of financial leverage (DFL) is 2.0.

Required -

(a) What is Beachcomber's degree of total leverage (DTL)?

(b) What impact will a 5 percent decrease in sales have on Beachcomber's (i) EBIT and (ii) net income? Beachcomber has no preferred stock.

Reference no: EM132698980

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