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     EduGorilla 
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    Direction: Read the following information carefully and answer the questions that follow.

    Priya Ltd. and Nirma Ltd. are two toy companies. Both the companies produce 1 million units of toys. The annual fixed cost of Priya Ltd. and Nirma Ltd. are Rs. 2 million and Rs. 0.5 million respectively. The per unit variable cost of Priya Ltd. and Nirma Ltd. are Rs. 4 and Rs. 3 respectively. Priya Ltd.’s unit selling price is 25% above the unit variable cost while Nirma Ltd.’s unit selling price is 50% above unit variable cost. The EBIT of Priya Ltd. is Rs. 5 million and it pays the annual interest expense of Rs. 800000.

    What is the degree of operating leverage for Nirma Ltd.?

    Options :-

    1. 1.3
    2. 1.4
    3. 1.5
    4. 1.6
    5. 1.7
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Reply To: Direction: Read the following information carefully and answer the questions that follow.Priya Ltd…..
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