Calculate final leverage and operating leverage

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Question 1: Calculate final leverage and operating leverage under situations.A and B and financial plans I and II respectively from the following information relating to the operation and capital structure of ABC ltd.

Installed capacity 1000 units

Selling price per units rs 20

Variyable cost per unit rs15

Fixed cost:situation A rs 1000

Situation B rs 1500

Capital Structure:

Financial plans

                       I.           II

Equity capital 5000.  7000

Debt at 10% 5000.    2000

                            Situation A.                     Situation B

            Plan I.           Plan II.        Plan I.           PlanII

DOL.      1.333.           1.333.          1.6.            1.6

DOL.        1.2.          1.071.           1.25.         1.087

Reference no: EM132578256

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