Alvarez Technologies Has Sales of $3,000,000

question 4

Multiple Choice

Alvarez Technologies has sales of $3,000,000.The company's fixed operating costs total $500,000 and its variable costs equal 45.50% of sales,so the company's current operating income is $1,135,000.The company's interest expense is $500,000.What is the company's degree of total leverage (DTL) ?

• A) 2.8580
• B) 2.6520
• C) 2.2401
• D) 2.5748
• E) 2.6263