Question

ABC Ltd. has fixed operating costs of ₹50 lakh and interest cost of ₹20 lakh. It earned EBIT of ₹80 lakh on sales of ₹200 lakh. Calculate the operating and financial leverage.

A OL = 2, FL = 1.33
B OL = 2, FL = 2.0
C OL = 1.6, FL = 1.33
D OL = 1.5, FL = 1.5
E OL = 2.5, FL = 2.0
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