Degree of combined leverage for the japanese firm

Reference no: EM131787327

Question: Firms in Japan often employ both high operating and financial leverage because of the use of modern technology and close borrower-lender relationships. Assume the Mistake Company has a sales volume of 125,000 units at a price of $25 per unit; variable costs are $5 per unit and fixed costs are $1,800,000. Interest expense is $400,000. What is the degree of combined leverage for this Japanese firm?

Reference no: EM131787327

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