Computation of degree of operating leverage

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Reference no: EM1310259

Computation of degree of operating leverage.

The company has expected sales of$20 million fixed operating cost are 2.5 million and the variable cost of ratio is 65%. The company has outstanding a$12 million, 8% bank loan. The firm also has outstanding 1 million shares of common stock ($1 PAR VALUE) the tax rate is 40%. What is the degree of operating leverage at a sales level of$20 million? The current degree of financial leverage and forecast of sales dropped to$15million?

Reference no: EM1310259

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