question 1

Part Three - Problems. Answer Three out of Four Problems Play-More Toys produces inflatable beach balls, selling 400,000 balls per year. Each Dan produced has a variable operating cost of $0.84 and sells for $1.00. Fixed operating costs are $28,000. The firm has annual interest charges of $6.000, and a 40% tax rate. Now calculate one following: a. Operating Break-Even point in units b. Decree of Operating Leverage (DOL) c. Degree of Financial Leverage (DFL) d. Degree of Combined Leverage (DCL) e. Also compare DCL to the product of DOL and DCL calculated in parts b and c Show Your Calculation