a. compute the degree of operating leverage.

b. compute the degree of gunancial leverage.

C-1 compute degree of combined leverage.

C-2 Using your answers to a. and b. calculate the percentage increase in EBIT AND EBT from a 20 percent increase in sales volume.

C-3 Does financial or operating leverage have the greater impact?

D. Break-even point in units. Break-even point. ? tires.

E. Break-even point considering the interest expense as a fixed cost.

Break-even. ? tires.

i will need step by step explanation plus answer thanks.

The Sterling Tire Company's income statement for 20%X is as follows: STERLING TIRE COMPANY Income Statement Year ended December 31, 20xx Sales (55,800 tires at 370 each) Less: Variable costs (55, tee tires at $45) $3,850, eee 2,475,000 Contribution margin Less: Fixed costs 1,375, eee 1,1ee, eee Earnings before interest and taxes (EBIT) Interest expense 275, eee 55.ee Earnings before taxes (EBT) Income tax expense (30%) 229,999 66,00 Earnings after taxes (EAT) $ 154,90 Given this income statement, compute the following: a. Degree of operating leverage (Round the final answer to 2 decimal places.) DOL 8.92 X b. Degree of financial leverage. (Round the final answer to 2 decimal places.) DFL c-1. Degree of combined leverage. (Do not round the Intermediate calculations. Round the final answer to 2 decimal places.) DCL c-2. Using your answers to a. and b. calculate the percentage increase in EBIT and EBT from a 20 percent increase in sales volume (Do not round the Intermediate calculations. Round the final answers to 2 decimal places.) EBIN c-3. Does financial orlope leverage have the greater impact? D DOL DFL c. Break-even point in units. (Round the final answer to the nearest whole number.) Break-even point tires e. Break-even point considering the interest expense as a fixed cost. Break-even point tires