alleryStart learning →A shop sells Rs 5 lakh, spends Rs 3 lakh variable and Rs 1.5 lakh fixed. DOL?
A4.0
B3.33
C2.5
D1.33
Answer & Solution
Correct answer: A. 4.0
Contribution is 2 lakh and EBIT is 0.5 lakh, so DOL is 4.0.
Keep practising Leverage (Finance)
Browse all Leverage (Finance) questions for CA Inter, or explore more Financial Management topics.
Related questions
DFL is 1.8 and EBIT rises 10% with no preference dividend. EPS rises by?Raising interest expense while EBIT stays fixed does what to DFL?A firm with no debt and no preference capital has a DFL of what?Interest of Rs 60,000 against EBIT of Rs 1,20,000 gives a DFL of?Firm B has DOL 4 and firm A has DOL 2. Sales rise 10%. B's EBIT rises by?A firm with no fixed costs sees sales rise 10%. EBIT rises by what?1,000,000 units sell at Rs 50; variable cost Rs 10; fixed cost Rs 1 crore. DOL?DOL is 1.33 and sales rise 15%. EBIT rises by about what?