Given the Following Financial Data for Boston Technology, Compute the Firm's

question 28

Multiple Choice

Given the following financial data for Boston Technology, compute the firm's degree of combined leverage. Assume a marginal tax rate of 40%. $\begin{array}{lrr}&2010&2011\\\text { Sales } & \$ 700,000 & \$ 760,000 \\\text { Fixed costs } & 175,000 & 190,000 \\\text { Variable costs } & 406,000 & 448,000 \\\text { EBIT } & 119,000 & 122,000 \\\text { Interest } & 42,000 & 46,000 \\\text { Shares outstanding } & 100,000 & 102,000\end{array}$

• A) 0.29
• B) -0.38
• C) -0.15
• D) 0.38

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Definitions:

Starting Points

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