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SOLVED: (a) Calculate the operating leverage (OL) and financial leverage (FL) for a firm with sales of 1,000 units with a selling price of 10/unit, variable cost of6/unit, fixed costs (excluding financial charges) of 1,500, and interest of750. Check your answers by using the elasticity definition of leverage and sales of 1,100 units.(b) What is the combined leverage (O FL) in (a)? Explain what this means if volume increases by 10%.(c) Why are taxes and the number of shares irrelevant when calc
SOLVED: (a) Calculate the operating leverage (OL) and financial levera…
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