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Explore the concept of leverage in finance, focusing on how fixed and variable costs influence a company's risk and return. Delve into operating, financial, and total leverage, understanding how these measures impact earnings and the variability of returns based on changes in sales volume. Examine scenarios with varying degrees of debt in a company's capital structure, to better understand the effects of leverage on profitability and the risk-return trade-off. Build your understanding of breakeven analysis to understand when a company covers its costs and begins to generate profit.