5 Homework Leverage 123 space retur The Sterling Tire Company's income statement for 20x1 is as follows: STERLING TIRE COMPANY Income Statement For the Year Ended December 31, 20x1 Sales (22,eee tires at $64 each) $1,408,000 Variable costs (22,eee tires at $32) 704,000 Fixed costs 420,000 Earnings before interest and taxes (EBIT) $ 284,000 Interest expense 51,000 Earnings before taxes (EBT) $ 233,000 Income tax expense (259) 58,250 Earnings after taxes (EAT) $ 174,750 a. Compute the degree of operating leverage. (Round your answer to 2 decimal places.) Degree of operating leverage 2.90 b. Compute the degree of financial leverage (Round your answer to 2 decimal places.) Degree of financial leverage c. Compute the degree of combined leverage. (Round your answer to 2 decimal places.) Degree of combined leverage d. Compute the break-even point in units. (Round your answer to the nearest whole number.) Break-even point units