CFA Practice Question

There are 120 practice questions for this study session.

CFA Practice Question

Consider a firm with sales of $500,000, cost of goods sold of $245,000, fixed operating costs of $50,000, and a financing expense of $60,000. The degree of total leverage for this firm is ______.

A. 1.10
B. 1.41
C. 1.76
Correct Answer: C

DTL = (S - VC)/(EBIT - I) = ($500 - $245)/($500 - $245 - $50 - $60) = 1.76

User Contributed Comments 3

User Comment
setmefree DTL = (S-VC)(S-VC-F-I)
2014 DTL = Q(p-v)/Q(p-v)-f-c
khalifa92 laugh at me
DTL= S-VC/S-VC-F * S-VC-F/S-VC-FC-C
it worked tho xD
You need to log in first to add your comment.