What is the degree of operating leverage for each

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Two Companies, Oplev and Finlev, Each have sales of 100,000 unites at a $2.00 cost/unit. Oplev has Variable Cost of $1.25/unit and a Fixed Cost of $60,000.. Finley has Variable cost of $1.75/unit and a fixed cost of $10,000. Oplev has interest expense of $6,000 and Finlev has interest Expense of $12,000. Each has a 40% Tax rate

A. What is the Degree of Operating leverage For each?

B. What is the degree of financial Leverage for Each?

C. Compare the relative risks of the two firms

Reference no: EM13953611

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