A summarized income statement for Leveraged Inc. is presented below. Sales $1,000,000 Cost of Sales 600,000 Gross Profit $ 400,000 Operating Expenses 250,000 Operating Income $ 150,000 Interest Expense 30,000 Earnings Before Tax $ 120,000 Income Tax 40,000 Net Income $ 80,000 The degree of financial leverage is: 1. $150,000/$120,000 2. $1,000,000/$400,000 3. $400,000/$120,000 4. $150,000/$30,000 5. $150,000/$80,000