Corporate Finance Q111
0. A manufacturing company has the following income statement.
| Income Statement | $ millions |
| Revenues | 1100 |
| Variable costs | 450 |
| Fixed costs | 225 |
| EBIT | 425 |
| Interest | 70 |
| Taxable Income | 355 |
| Tax | 142 |
| Net Income | 213 |
The degree of total leverage for the company is closest to:.
- Option : C
- Explanation : DTL = [Q (P – V)] / [Q (P – V) – F – C] = (1100 – 450) / 355 = 1.83
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