Question 4 - Show your workings.

The following information pertains to the Yoyo Berhad chain:

Sales RM600,000 Variable costs 200,000 Total contribution marain 400,000 Fixed costs 150,000 EBIT 250,000 Interest expense 50,000 Earninas before taxes 200,000 Taxes 130%) 60,000 Net income RM140,000

Required: a) Compute the BEP(RM) for Yoyo Berhad. (2 Marks)

b) Calculate the degree of operating leverage at this level of output Yoyo Berhad. (2 Marks)

c) Calculate the degree of financial leverage at this level of output for Yoyo Berhad. (2 Marks)

d) Compute the combined leverage for Yoyo Berhad. (1 Mark)

e) If sales increase by 10%, what will be the new level of Yoyo Berhad's EPS if the firm has 50,000 shares outstanding? (3 Marks) (Total: 10 Marks)