Question: Dell Technologies, Inc. makes computer chips. The firm's statement is as follows: Sales (5,000 chips at $40) ...... ......... ..........$200,000 Less: Variable costs (5,000 chips

Dell Technologies, Inc. makes computer chips. The firm's statement is as follows:

Sales (5,000 chips at $40) ......

......... ..........$200,000

Less: Variable costs (5,000 chips at $15)....

75,000

Fixed costs...

42,000

Earnings before interests and taxes (EBIT)...$ 83,000

-Interest(1)..........

10,000

Earnings before taxes (EBT..

..$ 73,000

-Taxes(1).

5,000

Earnings after taxes(EAT)..............

...$ 68,000

Compute the following:

a)The break-even point

b)Degree of financial leverage

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