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Sales (75,000units) P 750,000
Variable costs 225,000
Contribution margin P 525, 000
Fixed
Operating income P 337,000
Interest 75,000
Earnings before taxes P 262,500
Taxes (at 31%) 81,375
Net income P 181,125
Shares outstanding 15,000
The degree of financial leverage is
a. 1.29x
b. 4.50x
c. 3.50x
d. 1.32x
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