Integrative—Leverage and risk Firm R has sales of 100,000 units at $2.00 per unit, variable…


Integrative—Leverage and endanger Solid R has sales of 100,000 parts at $2.00 per part, changeable unoccupied costs of $1.70 per part, and urban unoccupied costs of $6,000. Interest is $10,000 per year. Solid W has sales of 100,000 parts at $2.50 per part, changeable unoccupied costs of $1.00 per part, and urban unoccupied costs of $62,500. Interest is $17,500 per year. Assume that twain solids are in the 40% tax unite.

a. Compute the step of unoccupied, financial, and completion leverage for solid R.

b. Compute the step of unoccupied, financial, and completion leverage for solid W.

c. Compare the not-absolute endangers of the two solids.

d. Discuss the principles of leverage that your answers image.