Question: 12. A summarized income statement for Leveraged Inc. is presented below. Sales Cost of Sales Gross Profit Operating Expenses Operating Income Interest Expense Earnings Before

12. A summarized income statement for Leveraged Inc. is presented below. Sales Cost of Sales Gross Profit Operating Expenses Operating Income Interest Expense Earnings Before Tax Income Tax Net Income $1,000,000 600,000 $ 400,000 250,000 $ 150,000 30,000 $ 120,000 40,000 $ 80.000 The degree of financial leverage is: a. 1.25 b. 1.5 c. 1.875 d. 2.5 e. 3.33

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