Question: Given below is the financial information for Tesla, a uniquely French all-natural artisanal soda. Sales (Units) - 4 00 000 Selling Price (per unit) -

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?

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