Answer to Question #336837 in Financial Math for VISHWESH

Question

For a business firm leverage is about the fixed operating cost and the fixed finance costs

in the cost structure of the firm. For the given details, identify for which firm the degree

of operating leverage and degree of financial leverage are higher and why so:

Firms Amrit Baayu

Sales (Rs.)

Variable cost p.u

Fixed cost (Rs.)

Output (units)

Interest

3,60,000

20

72,000

6,000

40,000

7,50,000

150

1,40,000

1,500

80,000

3.

Answer 1

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