Question: 2b. Calculate Operating leverage and Financial leverage under situations I and II and Financial plans A&B, respectively from the following information relating to the operation
2b. Calculate Operating leverage and Financial leverage under situations I and II and Financial plans A&B, respectively from the following information relating to the operation and capital structure of a company What are the combinations of Operating and Financial Leverage which give highest and least value? (10 m) Installed capacity - 2,000 units Actual production and sales - 50% of installed capacity Selling price per unit - 20/- Variable cost per unit - 10/- Fixed Cost : Situation 1 - 4000/- Situation II - 5000/- Capital Structure Equity Debt(10%) Total A 5000 15000 20000 B 15000 5000 20000
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