Khan Inc. is a small manufacturer of face masks. Last year, 50,000 masks were sold...
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Accounting
- Khan Inc. is a small manufacturer of face masks. Last year, 50,000 masks were sold for $20 each. The income statement is as follows:
Sales 1,000,000
Less variable cost 400,000
Less fixed cost 200,000
EBIT 400,000
Less interest 125,000
EBT 275,000
Less tax 40% 110,000
EAT 165,000
EPS (100,000 shares) 1.65
Find DOL, DFL and degree of total leverage. If sales increase by 5% what effect will it have on the EPS?
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