Business Studies, asked by adn9262ansari, 7 months ago

solve it........ .......
.....Answer should be correct

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Answered by queensp73

Hey Mate !

EBIT to become zero means 100% reduction in EBIT.

Financial Leverage=EBIT/EBIT=27,00,000/ 22,95,000 =1.1765

Operating Leverage=Contribution/EBIT = 33,00,000 /27,00,000=1.2222

Combined Leverage = 1.1764 x 1.2222= 1.438

Sales have to drop by 100/1.438 = 69.54%

New Sales will be = 7500000 x (1-0.6954) = ` 22,84,500(approx)

Hope it helps u !

#Keep smiling :)

Answered by Anonymous

Answer:

Hey Mate !

EBIT to become zero means 100% reduction in EBIT.

Financial Leverage=EBIT/EBIT=27,00,000/ 22,95,000 =1.1765

Operating Leverage=Contribution/EBIT = 33,00,000 /27,00,000=1.2222

Combined Leverage = 1.1764 x 1.2222= 1.438

Sales have to drop by 100/1.438 = 69.54%

New Sales will be = 7500000 x (1-0.6954) = ` 22,84,500(approx)

Hope it helps u !

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