Use the Below Information to Answer the Following Question Refer to the Table

question 45

Multiple Choice

Use the below information to answer the following question.
$\begin{array}{lr}\text { Sales }(100,000 \text { units }) & \$ 1,000,000 \\\text { Variable costs } & 300,000\\\text { Contribution margin } & 700,000 \\\text { Fixed manufacturing costs } & 200,000\\\text { Operating income } & 500,000 \\\text { Interest } & 75,000\\\text { Earnings before taxes } & 425,000 \\\text { Taxes }(30 \%) & 127,500\\\text { Net income }&\$297,500\end{array}$
Refer to the table. The degree of financial leverage is ________.

• A) 1.29x
• B) 4.20x
• C) 3.50x
• D) 1.18x

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Definitions:

Initial Integration

The process of incorporating new elements into a whole, particularly at the beginning stages of this integration.

Forming Stage

The initial phase of team development where members meet and start to form impressions about each other and establish group norms.

Optimal Size

The ideal number of members in a group or organization to maximize performance and productivity.

Rutgers University

A major public research university in New Jersey, known for its diverse academic programs and contributions to research.