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49 50 Question 42 The following information relates to MSF Corporation Not yet answered Finish atten Sales revenue = $500,000 (10.000 units @ $50/unit) Variable costs of operations $200,000 (10,000 units @ $20/unit) Contribution margin $300,000 Fixed costs of operation $200,000 Operating income (EBIT) $100,000 Interest expense $50,000 Earnings before taxes (EBT) $50,000 Points out of Flag question What is MSF Corporations degree of combined leverage (DCL) Select one: A. 2.0 O8.4.0 C. 6.0 D. 8.0
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Answer #1

Degree of combined leverage (DCL) = Contribution margin / Earnings before taxes (EBT)

Degree of combined leverage (DCL) = $300,000 / $50,000

Degree of combined leverage (DCL) = 6 times

Correct choice - C. 6.0

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