A company has net operating income of $1 million, an overall capitalization rate of 16 percent, and $1 million of 10 percent debt. The total value of the firm, using the net operating income method approach, is A $6,250,000 $7,667,000 C $5,667,000 D $6,667,000 Question 14 1.5 Points A company has fixed costs of $600,000 directly attributable to producing a particular product. The product sells for $2,000 a unit and variable costs are $1,200. The company is financed with $8 million of common equity financing and $2 million of long-term debt at 6 percent before taxes. It sold 1,000 units last year and expects volume to increase by 100 percent, what is the Degree of Financial Leverage (DFL) at earnings before interest and taxes (EBIT) of $200,000 ? 4.0 B 2.50 10.0 1.67