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Week 5 Lab2 Capital Structure Question

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Week 5 Lab2 Capital Structure Question;Capital Structure;A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million, interest costs of $2 million, and a 30 percent average tax rate.;1. Compute its DOL, DFL, and DCL.;2. What will be the expected level of EBIT and net income if next year's sales rise 10 percent?;3. What will be the expected level of EBIT and net income if next year's sales fall 20 percent?

 

Paper#78234 | Written in 18-Jul-2015

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