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CFA Level 1
Corporate Finance

Calculating Total Leverage

Easy Measures Of Leverage Total Leverage

A company has a fixed operating cost of $200,000 and generates a contribution margin of $50 per unit sold. Based on these metrics, calculate the Total Leverage for the company if it sold 10,000 units last year.

Total leverage is measured as the percentage change in net income for a given percentage change in sales. It includes both operating leverage and financial leverage in the calculations.

Hint

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