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Webster University Operations And Supply Chain Management Assignment Help - Managerial Finance

Question - The Sterling Tire Company's income statement for 2010 is as follows: Sterling Tire Company Income
Statement For the Year Ended December 31,2010 Sales (20,000 tires at $60 each) $1,200, 000 Less:
Variable costs (20,000 tires at $30) $ 600,000 Fixed cost $ 400,000 Earnings before interest and
taxes (EBIT) $ 200,000 Interest Expense $ 50,000 Earnings before tax (EBT) $ 150,000 Income tax
expense (30%) $ 45,000 Earnings after taxes (EAT) $ 105,000 Give the income statement, compute
the following: a. Degree of operating leverage b. Degree of financial leverage c. Degree of combined
leverage d. Break-even point in units Please show all steps

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