1. If EBIT equals $200,000 and interest equals $40,000, what is the degree of financial leverage? A. 5.33x B. 1.25x C. .8125x D. 4.33x 2. If a firm has the lowest possible degree of operating leverage and the lowest possible degree of financial leverage, then A. DOL equals 1. and DFL equals 0. B. DOL equals 0, and DFL equals 1. C. DOL equals 1, and DFL equals 1. D. None of the options Sales (100.000 units) Variable costs Contribution margin Fixed manufacturing costs Operating income Interest Earnings before taxes Taxes (30) Net Income S1.000.000 200.000 700.000 200.000 500.000 75.000 425.000 127.500 S297.500 A. 1.40x B. 1.56x C. 3.33x D. 2 22x