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Given the following information for Conserve Ltd. for the year 2020:
(000)
Sales (100,000 units) $2,000,000
Variable costs 1,400,000
Contributions margin $ 600,000
Fixed manufacturing costs 200,000
EBIT $ 400,000
Interest 100,000
EBT $ 300,000
Problem 1: Calculate the following:
A) The Degree of Operating Leverage (DOL)
B) The Degree of Financial Leverage (DFL)
C) Degree of Combined Leverage (DCL)
(D) If sales volume INCREASED by 30%, (1) What increase would CONSERVE Ltd. experience in EBIT in terms of a percentage?
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