Question: please do in excel and formulas display Integrative: Leverage and risk Firm R has sales of 100,000 units at $2.00 per unit, variable operating costs
Integrative: Leverage and risk Firm R has sales of 100,000 units at $2.00 per unit, variable operating costs of $1.70 per unit, and fixed operating costs of $6,000. Interest is $10,000 per year. Firm W has sales of 100,000 units at $2.50 per unit, variable operating costs of $1.00 per unit, and fixed operating costs of $62,500. Interest is $17,500 per year. Assume that both firms are in the 40% ta bracket. LG 2 P13-16 a. Compute the degre ofoperating, inancial, and toal leverage for fim R b. Compute the degree of operating, financial, and total leverage for firm W c. Compare the relative risks of the two firms. d. Discuss the principles of leverage that your answers illustrate
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