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Corporate Tax Planning

(MBA-Accounting)

Chapter: Corporate Tax Sequences

Corporate Tax Planning Chapter-03- Corporate Tax Sequences
Problem-01 NU 2012 3rd year
The Abir and Company expected earnings before interest and taxes (EBIT)/ Net operating income (NOI) is
Tk 50000. The company has 10% debt of Tkl 200000. The equity capitalization rate (Ke) of the company is
12.50%. the number common stock of the company is 2000 shares.

Required:
a) Find out the total value of the firm.
b) Find out the overall cost of capital of the firm.
c) Determine the market value per share.
d) Determine the EPS.

Solution:
Given,
Earnings before interest and tax (EBIT) = Tk 50000
Value of Debt (B) = Tk 200000
Rate of interest (Kd) = 10%
Capitalization Rate (Ke) = 12.50%
Number Share (N) = 2000 Share

Table for calculation and Requirement

Particulars Taka
EBIT 50000
Less: Interest (200000×10%) 20000
EBT/NI 30000
Cost of Capitalization Rate (Ke) 12.50%
Value of Equity/ Share , S = (EBT ÷Ke) 240000
Value of the Debt (B) 200000
Number of share (N) 2000 share

Req: (a) Value of the Firm V = S+B 440000

Req: (b) Overall Cost of Capital (Ko) = (EBIT÷V)×100 11.36%
Req: (c) Market value per Share (MPS) = (S÷N) 120
Req: (d) Earnings per share (EPS) = (EAT÷N) 9

Problem-02 NU 2016 3rd year

Tasin Company with net operating earnings ( EBIT) of Tk 30000 is attempting evaluate a number of
possible capital structure given below. Which of the capital structure will you recommended?

Capital structure Level of Debt (Tk) Cost of Debt ( Kd) Cost of Equity (ke)
1 30000 10% 12%
2 40000 10% 12.50%
3 50000 11% 13.50%
4 60000 12% 15%
5 70000 14% 16%

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Corporate Tax Planning Chapter-03- Corporate Tax Sequences

Solution:
Table for calculation and Requirement
Particulars Capital Structure
1 2 3 4 5
Level of Debt ( B) Taka Tk 30000 Tk 40000 Tk 50000 Tk 60000 Tk 70000
Cost of Debt ( Kd) 10% 10% 11% 12% 14%

EBIT 30000 30000 30000 30000 30000

Less: Interest 3000 4000 5500 4800 9800
EBT 27000 26000 24500 22800 20200
Cost of Equity (Ke) 12% 12.50% 13.50% 15% 16%

Value of Equity (S) = (EBT ÷ Ke) Tk 225000 Tk 208000 Tk 181481 Tk 152000 Tk 126250

Value of the firm, V = B+S Tk 255000 Tk 248000 Tk 231481 Tk 212000 Tk 196250

Overall Cost of Capital, 11.76% 12.10% 12.96% 14.15% 15.29%

𝑬𝑩𝑰𝑻
Ko = ×100
𝑽

Decision:
Capital structure (1) with debt of Tk 30000 should be selected at this level value of the firm/ company (V)
is highest and overall cost of capital/ Cost of capital (Ko) is Lowest.

Problem-03
Company X and Y are in the same risk class, except capital structure. Company X has 10% debenture of TK
1800000. EBIT of both companies earn 20% before interest and Taxes on their total assets of Tk 3000000
Corporate tax rate is 50% and capitalization rate is 15% for an equity company.

a) Determine market value of the firm using net income Approach

b) Determine market value of the firm using net operating income Approach.
c) Calculate Overall cost o capital for both the firms.

Solution:
Requirement: (a)
Given,
Earnings before interest and tax (EBIT) = Tk 3000000×20% = Tk 600000
Value of Debt (B) = Tk 1800000
Rate of interest (Kd) = 10%
Capitalization Rate (Ke) = 15%

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Corporate Tax Planning Chapter-03- Corporate Tax Sequences
Value of the firm Using Net Income Approach (NI):
Particulars Firm- X Firm -Y
Levered (Tk) Unlevered (Tk)
EBIT 600000 600000
Less: Interest (1800000×10%) 180000 -----------
EBT/NI 420000 600000
Less: Tax @ 50% on EBT 210000 300000
EAT 210000 300000
Cost of Capitalization Rate (Ke) 15% 15%
Value of Equity/ Share , S = (EAT ÷Ke) Tk 1400000 Tk 2000000

Value of the Debt (B) Tk 1800000 ------------

Req: (a) Value of the Firm V = S+B TK. 3200000 Tk 2000000

Requirement: (B)

Value of the firms under Net Operating Income Approach (NOI):

Value of Unlevered firm (Firm –Y)

𝐸𝐵𝐼𝑇 (1 − 𝑇𝑅)
𝑉𝑢 = 𝑉𝑌 =
𝐾𝑒𝑢
600000 (1−0.50)
= = Tk 2000000
0.15

Value of Levered firm (Firm- X)

𝑉𝐿 = 𝑉𝑋 = 𝑉𝑢 + (𝐵 × 𝑇𝑅)
= 𝑇𝑘 2000000 + (1800000 × 50%)
= 𝑇𝑘 2900000

Requirement : (C) Here,

V = Tk 2900000
(i) Overall Cost of capital (Under NOI) Approach: B = Tk 1800000
𝑁𝑒𝑤 𝑆 𝐵 New S = V – B = Tk 1100000
𝐾𝑜 = 𝑁𝑒𝑤 𝐾𝑒 ( ) + 𝑁𝑒𝑤 𝐾𝑑 ( )
𝑉 𝑉 (𝐸𝐵𝐼𝑇−𝐼)(1−𝑇𝑅)
New Ke = 𝑆
1100000 1800000 (600000−180000)(1−0.50)
= 0.1909 (2900000) + 0.05 (2900000) = = 19.09%
1100000
New Kd = 10% (1-TR) = 10% (1-0.50) = 5%
= (0.1909 × 0.379310) + (0.05 × 0.62068) Overall Cost of Capital, Ko = ?
= 0.1034
= 𝟏𝟎. 𝟑𝟒%
(ii) Overall Cost of capital (Under NI) Approach:
𝑆 𝐵 Here,
𝐾𝑜 = 𝐾𝑒 ( ) + 𝐾𝑑 ( )
𝑉 𝑉 V = Tk 2000000
B=0
2000000 0
= 0.15 (2000000) + 0 (2000000) S = V – B = Tk 2000000
Ke = 15% = 0.15
Kd = 0
= (0.15 × 1) + (0 × 0)
= 0.15
Overall Cost of Capital, Ko = ?
= 𝟏𝟓%
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Corporate Tax Planning Chapter-03- Corporate Tax Sequences

Problem-04 NU MBA- 2015 B-08

Real Tech Expects earnings before interest and taxes (EBIT) of Tk 1200000 every year into perpetuity. The
firm currently has no debt, but it can borrow at 12% per annum. Firms cost of equity is 22% and Corporate
tax rate is 36%.
Required:
i) Find out the value of the firm.
ii) What will be the value of Real Tech be if it borrows Tk 1000000 and uses the proceeds to
repurchase of equity? (B-Page 75 - P-1)

Problem-05 NU MBA- 2013 B-09

You are supplied with the following information. Calculate the value of the firm under MM model:
Earnings before interest and tax Tk. 600000, Return on investment 15%, Tax rate 40%. (B-Page 75 - P-2)

Problem-06 NU MBA- 2017, 2019 B-07

Megna ltd. has the following information:
Return on investment/ Cost of equity 15%
Cost of debt/interest rate 12%
12% Debenture Tk 500000
Value of unlevered firm Tk 2000000
Tax Rate 50%
Required: (B-Page 78 - P-8)
i) EAT ii) EBIT and iii) Value of the levered firm.

Problem-07 NU MBA- 2018 C-15(b)

From the following selected data, determine the value of the firms X and Y belonging to the identical risk
class, under NI Approach:
Particulars Levered firm-X Unlevered firm –Y
EBIT Tk 225000 Tk 225000
Interest on bond @ 15% Tk 75000 -
Cost of equity capital is 20%.

Required: (B-Page 89 - P-18)

Which of the firms has an optimum capital structure under NI Approach?

Problem-08 NU MBA- 2017 C-16

a) Following information are available:
Particulars Firm – U Firm- L
EBIT Tk 250000 Tk 250000
10% Debt - Tk 75000
𝐾𝑒𝑢 15% -
Corporate tax rate 40% 40%
Personal Tax rate 10% 10%

Required: (B-Page 95 - P-25)

i) Value of the unlevered firm? ii) Value of levered firm iii) Gain from leverage
iv) Cost of equity Unlevered firm. v) Cost of equity levered firm.

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Corporate Tax Planning Chapter-03- Corporate Tax Sequences

Problem-08
b) The following information are given to you:
Details Firm –U Firm - L
EBIT Tk 220000 Tk 220000
10% Debt ---- Tk 700000
𝐾𝑒𝑢 22% ----
Corporate Tax Rate CTR) 35% 35%
Personal Tax Rate (PTR) 22% 22%
Interest Tax Rate (ITR) 22% 22%
Cost of Financial distress ---- 4.50%

Requirement:
a) Value of U firm
b) Gain from Leverage
c) Amount of Cost of financial distress
d) Value of L Firm
Solution:
Required: a) Value of U firm
𝑬𝑩𝑰𝑻(𝟏−𝑪𝑻𝑹)(𝟏−𝑷𝑻𝑹)
𝑽𝒖 = 𝐾𝑒 𝑢
220000(1 − 0.35)(1 − 0.22)
=
0.22

= Tk 507000

Required: b) Gain from Leverage / Added Value of Debt

(𝟏−𝑪𝑻𝑹)(𝟏−𝑷𝑻𝑹)
= {𝟏 − } × 𝐷𝑒𝑏𝑡
(𝟏−𝑰𝑻𝑹)
(1 − 0.35)(1 − 0.22)
= {1 − } × Tk 700000
1 − 0.22

= Tk 245000

Alternative formula:
𝐺𝑎𝑖𝑛 𝑓𝑜𝑟𝑚 𝑙𝑒𝑣𝑒𝑟𝑎𝑔𝑒/𝑉𝑎𝑙𝑢𝑒 𝐴𝑑𝑑𝑒𝑑 = 𝑉𝐿 - 𝑉𝑈

Required: c) Amount of Financial Distress

= Debt × Cost of financial distress
= Tk 700000 ×4.50%
= Tk 31500

Required: d) Value of L firm

𝑉𝐿 = 𝑉𝑈 + Gain from leverage – Amount of financial distress
= Tk 507000+245000-31500
= Tk 720500

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Corporate Tax Planning Chapter-03- Corporate Tax Sequences
Problem-09 NU 2017 Acc. 1st year
The capital structure of IDLC is given below:
12 % debenture Tk 1200000
10 % Preferred stock Tk 1000000
Common stock @100 per Tk 800000
Total = Tk 3000000

The company needs additional financing of Tk 1200000. This can be financed in the following ways:
i) Fully by common stock of Tk 100 each.
ii) Fully by 12% debenture
iii) Fully by 13% preferred stock

If the company’s expected EBIT Tk 800000 and corporate tax rate is 25%.

Required:
i) Which alternative should be selected and why?
ii) Calculate the indifference point of EBIT and prove it between alternative method (i) and (ii).

Solution:
Workings:
Calculation of Total Number of share:
Old share = ( 800000 ÷100) = 8000 Share
Total Share = Old + New
Alt-1: 8000+ (1200000÷100) = 20000 Share
Alt-2: 8000 Share
Alt-3: 8000 Share

Calculation of Total Interest:

Old Interest =( 1200000×12%) = Tk 144000
Total Interest = Old + New
Alt-1: Tk 144000
Alt-2: Tk 144000 + ( Tk 1200000×12%) = Tk 288000
Alt-3: Tk 144000

Calculation of Total Preference Dividend:

Old preference Dividend = (Tk 1000000×10%) =Tk 100000
Total Preference dividend = Old + New
Alt-1: Tk 100000
Alt-2: Tk 100000
Alt-3: Tk 100000 +(1200000×13% ) = Tk. 256000

Requirement: (i)

Calculation of EPS:
Particulars Alt-1 Alt-2 Alt-3
EBIT 800000 800000 800000
Less: Interest 144000 288000 144000
EBT 656000 512000 656000

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Corporate Tax Planning Chapter-03- Corporate Tax Sequences
Less: Tax @ 25% 164000 128000 164000
EAT 492000 384000 492000
Less: Preference dividend 100000 100000 256000
EACS 392000 284000 236000
No. of Share ,N 20000 8000 8000

EPS= (EACS ÷N) Tk 19.6 Tk 35.5 Tk 29.5

Comments: The Company should select Alternative – (ii) because EPS is higher from any other
Alternatives.

Requirement: (ii)
Calculation of Indifference point of EBIT between method (i) and (ii):
Let, Indifference point of EBIT = X

We Know that, Indifference Point of EBIT

  X  Int.I 1  TR   PD    X  Int.II 1  TR   PD 

 =  
 NI   N II 

  X  1440001  0.25  0    X  2880001  0.25  0 

  =  
 20000   8000 
  X  144000  0.75    X  288000  0.75 
  =  
 2 .5   1 
 0.75 X  108000   0.75 X  216000 
 =  
 2 .5   1 
 1.875X - 540000 = 0.75X – 108000
 1.875X-0.75X = -108000+540000
 1.125X = 432000
 X = 384000
Indifference Point of EBIT = Tk 384000

Prove/Calculation of Indifference EPS

Particulars Alt-1 Alt-2
EBIT 384000 384000
Less: Interest 144000 288000
EBT 240000 96000
Less: Tax @ 25% 60000 24000
EAT 180000 72000
Less: Preference dividend 0 0
EACS 180000 72000

No. of Share ,N 20000 8000

EPS= (EACS ÷N) Tk 9 Tk 9

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Corporate Tax Planning Chapter-03- Corporate Tax Sequences
Problem-10 NU 2004 , 2008
ABC Sati co. has the following capital structure:
Source Amount
Equity (Tk 100 per share) 1000000
12% debt 500000
Total 1500000
The company wishes to raise Tk 500000 for expansion program. The following alternative is available:
(i) 100% equity
(ii) 50% equity and 50% debt 12% interest
(iii) 100% debt.
The expected EBIT is Tk 2000000 the tax rate is 40%. Calculate the EPS and which one would you prefer
and the indifference point between (i) and (ii).

Solution:

Workings:
Calculation of Total Number of share:
Old share = ( 1000000 ÷100) = 10000 Share
Total Share = Old + New
Alt-1: 10000+ (500000÷100) = 15000 Share
Alt-2: 10000 Share + (500000×50%)÷100 = 12500 Share
Alt-3: 10000 Share

Calculation of Total Interest:

Old Interest =( 500000×12%) = Tk 60000
Total Interest = Old + New
Alt-1: Tk 60000
Alt-2: Tk 60000 + ( Tk 500000×50%)×12% = Tk 90000
Alt-3: Tk 60000 + ( Tk 500000×100%)×12% = Tk 120000

Requirement: (i)
Calculation of EPS:

Particulars Alt-1 Alt-2 Alt-3

EBIT 2000000 2000000 2000000
Less: Interest 60000 90000 120000
EBT 1940000 1910000 1880000
Less: Tax @ 40% 776000 764000 752000
EAT 1164000 1146000 1128000
Less: Preference dividend 0 0 0
EACS 1164000 1146000 1128000

No. of Share ,N 15000 12500 10000

EPS= (EACS ÷N) Tk 77.6 Tk 91.68 Tk 112.8

Comments: The Company should select Alternative – (iii) because EPS is higher from any other
Alternatives.

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Corporate Tax Planning Chapter-03- Corporate Tax Sequences
Requirement: (ii)
Calculation of Indifference point of EBIT between method (i) and (ii):
Let, Indifference point of EBIT = X

We Know that, Indifference Point of EBIT

  X  Int.I 1  TR   PD    X  Int.II 1  TR   PD 

 =  
 NI   N II 

  X  600001  0.40  0    X  900001  0.40  0 

  =  
 15000   12500 
  X  60000  0.60    X  90000  0.60 
  =  
 1 .2   1 
 0.60 X  36000   0.60 X  54000 
 =  
 1 .2   1 
 0.72X - 64800 = 0.60X – 36000
 0.72X-0.60X = -36000+64800
 0.12X = 28800
 X = 240000
Indifference Point of EBIT = Tk 240000

Prove/Calculation of Indifference EPS

Particulars Alt-1 Alt-2
EBIT 240000 240000
Less: Interest 60000 90000
EBT 180000 150000
Less: Tax @ 40% 72000 60000
EAT 108000 90000
Less: Preference dividend 0 0
EACS 108000 90000

No. of Share ,N 15000 12500

EPS= (EACS ÷N) Tk 7.2 Tk 7.2

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Corporate Tax Planning Chapter-03- Corporate Tax Sequences
Problem-11 NU MBA 2015 B-09
Present Capital Structure of Jewel Shoe Company ltd. Is given below:

Tk 50 Lac fully collected by the ordinary shares.

Company needs Tk 40 lac for the extension of their plant. So they are considering the following
alternatives:
Alternative-I Tk 20 lac Debt and Tk 20 lac ordinary share.
Alternative-II Tk 10 lac Preferred stock, Tk 15 lac Debt and Tk 15 lac ordinary shares.

Expected EBIT is Tk 850000, Tax rate is 20%. Rate of interest 12%, Preferred stock dividend rate is 6%.
Price per Ordinary share is Tk 100. (B- Page-78 P-07)

Required: i) EPS ii) Make a comment on the basis of EPS.

Problem-12 NU MBA 2016 C-14

A Production company has 16000 equity shares of Tk 100 each in its present capital structure. The company
needs Tk 25 lac for the extension of their project, so they are considering the following methods of finance-

Alternative-I 10000 equity share of Tk 200 each and Rest of 10% bond
Alternative-II 14% loan of Tk 15 lac and Rest 10% preferred stock.
Alternative –III 20000 debenture of Tk 50 each at 8% interest and rest of the amount by equity shares
of Tk 200 each.

Expected EBIT is Tk 590000, Tax Rate is 30%. (B- Page-88 P-17)

Calculate: i) EPS ii) Return on equity iii) Return on investment.

Problem-13 NU MBA 2017 C-17

The balance sheet of Hannan Company is as follows:
Liabilities TK Assets TK
Equity capital (TK 10 per share) 60000 Net fixed cost 150000
10% long term debt 80000 Current assets 50000
Retained earnings 20000
Current liabilities 40000
Totals 200000 Totals 200000

The company’s total assets turnover ratio 3 times; its fixed costs are TK 100000 and its variable cost ratio is
40 %. Tax rate is 35%
a) Calculate for the company different types of leverage.
b) EPS
c) Determine the likely level of EBIT if EPS is-
1) TK 3 2) TK 0 3) TK 1

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Corporate Tax Planning Chapter-03- Corporate Tax Sequences
Solution:
ABC Company
Income Statement
Particulars Amount (Tk.)
Sales (Workings-1) 600000
Less: Variable Cost (VC) (600000× 40%) 240000
Contribution Margin (CM) 360000
Less: Fixed Cost (FC) 100000
Earnings before interest and Tax (EBIT) 260000
Less: Interest (800000× 10%) 8000
Earnings before Tax (EBT) 252000
Less: Tax @ 35% on EBT 88200
Earnings after Tax (EAT) 163800
Less: Preference Dividend (PD) 0
Earnings Available For Shareholders (EACS) 163800
Workings: (1)
Calculation of Sales:
𝑆𝑎𝑙𝑒𝑠
Assets Turnover = 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
𝑆𝑎𝑙𝑒𝑠
=> 3 = 200000
∴ 𝑆𝑎𝑙𝑒𝑠 = 𝑇𝑘. 600000

Workings: (2)
Number of Share = Tk 60000÷ 10 = 6000 𝑠ℎ𝑎𝑟𝑒𝑠

Required: (a)
𝐶𝑀 360000
Degree of Operating Leverage, (DOL) = 𝐸𝐵𝐼𝑇 = 260000 = 1.3846 Times

𝐸𝐵𝐼𝑇 260000
Degree of Financial Leverage, (DFL) = = 252000 = 1.0317Times
𝐸𝐵𝑇

Degree of Combined Leverage, (DCL) = DOL× DFL = 1.3846× 1.0317 = 1.4285 Times

Required: (b)
𝐸𝐴𝐶𝑆 163800
Earnings per Share, (EPS) = 𝑁 = 6000 = Tk. 27.30 per share

Required: (C) –(1)

When EPS = Tk 3 Then
(𝐸𝐵𝐼𝑇 − 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡)(1 − 𝑇𝑅)
𝐸𝑃𝑆 =
𝑁
(𝐸𝐵𝐼𝑇 − 8000)(1 − 0.35)
=> 3 =
6000
=> (𝐸𝐵𝐼𝑇 − 8000) × 0.65 = 18000
=> (0.65 𝐸𝐵𝐼𝑇 − 5200) = 18000

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Corporate Tax Planning Chapter-03- Corporate Tax Sequences
=> 0.65 𝐸𝐵𝐼𝑇 = 18000 + 5200
=> 0.65 𝐸𝐵𝐼𝑇 = 23200
∴ 𝐸𝐵𝐼𝑇 = 𝑇𝑘 35692
Required: (2) and (3) try at Home

Problem-14
Oxezen Company recently Sold 20000 units @ @5 per unit where Variable Cost per unit is Tk 10 and Fixed
Cost Tk 150000. The Capital structure of the Company is as follows:
Common Stock (20000 Shares @ Tk 100 each) Tk 2000000
10% Debt 200000
5% Preference Share 800000
Total 3000000
Assume that the company is in the 50% tax bracket you are required to:
a) Calculate Break Even Point In units & and In Tk.
b) Calculate EPS Under 20000 units and 25000 units
c) Calculate Return On Equity (ROE).
Solution:
Oxezen Company
Income Statement
20000 units 25000 units
Particulars
Amount Amount
Sales @ Tk 25 per unit 500000 625000
Less: Variable Cost (VC) @ 10 per unit 200000 250000
Contribution Margin (CM) 300000 375000
Less: Fixed Cost (FC) 150000 150000
Earnings before interest and Tax (EBIT) 150000 225000
Less: Interest (200000×10%) 20000 20000
Earnings before Tax (EBT) 130000 205000
Less: Tax @ 50% on EBT 65000 102500
Earnings after Tax (EAT) 65000 102500
Less: Preference Dividend (PD) (800000×5%) 40000 40000
Earnings Available For Shareholders (EACS) 25000 62500
No of Share, N 20000 share 20000 share
𝑬𝑨𝑪𝑺 25000 62500
Required: (b) EPS= = =
𝑵 20000 20000
= Tk 1.25 = Tk 3.125

Prepared By – Abdullah BBA Hon’s (1st Class), MBS (Accounting) 1st Class NU, MBA
(Accounting) 1st Class, Cumilla University. Mobile- 01718231253 Page 12
Corporate Tax Planning Chapter-03- Corporate Tax Sequences
Required: (a)
𝐹𝑖𝑥𝑒𝑑 𝐶𝑜𝑠𝑡
Break Even Point (In units) = (𝑆𝑝−𝑉𝑐)𝑝𝑒𝑟
𝑢𝑛𝑖𝑡
150000
= (25−10)𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 = 10000 𝑢𝑛𝑖𝑡𝑠

Break Even Point (In Tk.) = Break Even point (in units)× Selling price per unit
= 10000× 𝑇𝑘 25 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 = 𝑇𝑘 250000
Required: (C)
𝐸𝐴𝐶𝑆 25000
Return on Equity (ROE) = 𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝐶𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘 × 100 = 2000000 × 100 = 1.25%

Problem-15 NU MBA 2018 B-09

You are supplied the following data relating to Star ltd.
Variable Expense of sales 70%
Annual interest paid Tk 8000.
Degree of Operating leverage 5:1
Degree of Financial leverage 3:1
Income tax rate is 35%. (B- Page-81 P-11)

Compute earnings after taxes of the company.

Problem-16 NU MBA 2015 C-16

The capital structure of ABC ltd. Is composed of Common stock capital of Tk 100000(1000 shares @ Tk
100 each) and of 15% debenture of Tk 200000. Corporate tax rate of the company is 25%. The company’s
last year data were as follows:
Sales 20000 units @ Tk 10 each
Variable cost @ Tk 4 each
Fixed cost is TK 70000

Required: (B- Page-85 P-14)

i) What are the degree of operating leverage, Degree of Financial leverage and Total leverage?
ii) What will be the impact of increasing sales by 40% and 60%?

Prepared By – Abdullah BBA Hon’s (1st Class), MBS (Accounting) 1st Class NU, MBA
(Accounting) 1st Class, Cumilla University. Mobile- 01718231253 Page 13