For a business firm leverage is about the fixed operating cost and the fixed finance costs in the cost structure of th
Posted: Sun May 29, 2022 4:50 pm
For a business firm leverage is about the fixed operating cost and the fixed finance costs
in the cost structure of the firm. For the given details, identify for which firm the degree
of operating leverage and degree of financial leverage are higher and why so: (10 Marks)
Firms
Amrit
Baayu
Sales (Rs.)
Variable cost p.u
Fixed cost (Rs.)
Output (units)
Interest
3,60,000
20
72,000
6,000
40,000
7,50,000
150
1,40,000
1,500
80,000
in the cost structure of the firm. For the given details, identify for which firm the degree
of operating leverage and degree of financial leverage are higher and why so: (10 Marks)
Firms
Amrit
Baayu
Sales (Rs.)
Variable cost p.u
Fixed cost (Rs.)
Output (units)
Interest
3,60,000
20
72,000
6,000
40,000
7,50,000
150
1,40,000
1,500
80,000