2. The Capital structure of ABC Ltd, is as under: Equity share capital 100 Lacs 10%...

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2. The Capital structure of ABC Ltd, is as under:

Equity share capital	₹ 100 Lacs
10% Debentures	₹ 50 Lacs

The sales for the year 2019 are 1.5 Lac units@ ₹ 40per unit

Also, the variable cost per unit is 20 % of sales revenue

₹ 12 Lacs is the fixed operating cost.

Assume Income tax rate as 40 %

Calculate Operating, Financial and Combined Leverage of the firm and interpret the result. (10 Marks)

The answer should be a min of 800 Words with plagiarism-free.

Related Book For answer-question

Financial and Managerial Accounting

ISBN: 978-0132497978

3rd Edition

Authors: Horngren, Harrison, Oliver

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Posted Date: Apr 06, 2020 11:18 PM

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2. The Capital structure of ABC Ltd, is as under: Equity share capital 100 Lacs 10%...

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operating leverage133 it indicates 1 change in sales ... View the full answer

Financial and Managerial Accounting

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