Given the following financial data for Boston Technology, compute the firm's degree of combined leverage. Assume a marginal tax rate of 40%. $\begin{array}{lrr}&2010&2011\
\text { Sales } & \$ 700,000 & \$ 760,000 \
\text { Fixed costs } & 175,000 & 190,000 \
\text { Variable costs } & 406,000 & 448,000 \
\text { EBIT } & 119,000 & 122,000 \
\text { Interest } & 42,000 & 46,000 \
\text { Shares outstanding } & 100,000 & 102,000
\end{array}$
A) 0.29
B) -0.38
C) -0.15
D) 0.38

Question

Quizplus · Accepted Answer

The Answer of Given the following financial data for Boston Technology, compute the firm's degree of combined leverage. Assume a marginal tax rate of 40%. $\begin{array}{lrr}&2010&2011\
\text { Sales } & \$ 700,000 & \$ 760,000 \
\text { Fixed costs } & 175,000 & 190,000 \
\text { Variable costs } & 406,000 & 448,000 \
\text { EBIT } & 119,000 & 122,000 \
\text { Interest } & 42,000 & 46,000 \
\text { Shares outstanding } & 100,000 & 102,000
\end{array}$
A) 0.29
B) -0.38
C) -0.15
D) 0.38

Given the Following Financial Data for Boston Technology, Compute the Firm's