FIN 2000 – Firms in Japan often employ both high operating and financial leverage
January 7th, 2018
Firms in Japan often employ both high operating and financial leverage because of the use of modern technology and close borrower–lender relationships. Assume the Mitaka Company has a sales volume of 131,000 units at a price of $26 per unit; variable costs are $5 per unit, and fixed costs are $1,860,000. Interest expense is $406,000.What is the degree of combined leverage for this Japanese firm? (Round your answer to 2 decimal places.) Degree of combined leverage