Given below is the financial information for Tesla, a uniquely French all-natural artisanal soda. Sales (Units) -

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Given below is the financial information for Tesla, a uniquely French all-natural artisanal soda.

Sales (Units) - 4 00 000

Selling Price (per unit) - Rs 32

Fixed Cost - 450000

Variable Cost(per unit) - 24

Debt - 1000000 Interest Rate -12%

Based on the information answer the following:

A. What is the Degree of Operating Leverage for the firm? What are its implications for firm's financial decision-making?

B. How much would the firm's sales have to come down so that its EBT is equal to zero?

Related Book For answer-question

Management and Cost Accounting

ISBN: 978-1408093887

8th edition

Authors: Colin Drury

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Posted Date: Jul 03, 2023 06:34 AM

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Given below is the financial information for Tesla, a uniquely French all-natural artisanal soda. Sales (Units) -

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To answer your questions we need to calculate the Degree of Operating Leverage DOL and determine the sales level at which the firms Earnings Before Ta... View the full answer

Management and Cost Accounting

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