1. What should be the formula in B5? a)B/(B3-B4)/B3 b) BI/B3-B4 B3 c)(B1/B3)-B4 B3 d) -B1/(B3-B4)P3 e) BI/(B3+B4)*B3 1 Fixed Costs 2 Unit Sales 3 Price per Unit 4 Variable Cost per Unit 5 Operating Break-even Point (Dollars) $750,000 100,000 $40 $15 Solution: 2. What should be the formula in B8? A800,000 1 Fixed Costs a) B1/(B2-B7/(1-B6)) b)B2/(B3-B7/(1-B6)) c) B2/B3-B7/(1-B6) d) -B3/(B2-B7/(1-B6)) e) B2/(B3-B7(1+B6)) EBIT 3 Earnings Before Tax 4 Price per Unit 5 Variable Cost per Unit 6 Tax Rate 7 Preferred Dividends 8 Degree of Financial Leverage 2,000,000 300,000 $65 $35 30% 90,000 1.71 Solution