80 PART 2: The Springer Company sells its product for $20 per unit. Its fixed costs are $10,000 and the variable cost per unit is $10. 1-5 (a) Determine the break-even point in units and dollars. Determine the earnings before interest and taxes at sales of 1,500 units. What is the new break-even point if the price per unit increases from $20 to $30? (b) (c) (d) Determine the degree of operating leverage at sales of 2,000 and 4000 units, respectively 6 The Savannah Company has 10,000 shares of common stock outstanding with a par value of $40, and its tax rate is 48 percent. The Savannah Company is weighing the choice among three financing alternatives for a major expansion program which would require $100,000 and increase its operating profit from $90,000 to $125,000. The financing alternatives to raise the needed $100,000 are as follows: 8 8 (a) 2,000 common shares at $50 net to the company. (b) $100,000 of 7 percent preferred stock 0