1. A firm has Fixed costs of $100,000 and Variable Costs are 60% of Sales. At what level of Sales will DOL = 2?

a) $350,000 b) $425,000 c) $500,000 d) $750,000

2. A firm has Sales of $1,000,000, Variable Costs are 60% of Sales, Fixed costs are $200,000, and Interest Expense is $50,000. If Sales increase by 10%, then how much will EBT increase?

a) 13%                  b) 27%           c) 33%            d) 40%