Given the Following Financial Data for Boston Technology, Compute the Firm's

Multiple Choice

Given the following financial data for Boston Technology, compute the firm's degree of combined leverage. Assume a marginal tax rate of 40%. $\begin{array}{lrr}&2010&2011\\\text { Sales } & \$ 700,000 & \$ 760,000 \\\text { Fixed costs } & 175,000 & 190,000 \\\text { Variable costs } & 406,000 & 448,000 \\\text { EBIT } & 119,000 & 122,000 \\\text { Interest } & 42,000 & 46,000 \\\text { Shares outstanding } & 100,000 & 102,000\end{array}$

A) 0.29
B) -0.38
C) -0.15
D) 0.38