Can someone please check my work? Thank you!

1. Company A has fixed costs of $120,000, sells its product for $7/unit, and each product costs $5.50/unit to produce. Find the degree of operating leverage (DOL) at a sales volume of 100,000 units

100,000 ($7 - $5.5) / 100,000 ($7 - $5.5) - 120,000 = 150,000 / 30,000 = 5 DOL

2. Company B has earnings before interest and taxes (EBIT) of $1,000,000, and currently has $10,000,000 in equity and $0 in debt. Company B is considering a 30% debt ratio, and at this level, could acquire capital at 8% interest. The applicable tax rate is 40%. Find Company Bs net income at a 30% debt level?

Value of Debt = 30% * $10,000,000 = $3,000,000

Interest Expense = 8% * $3,000,000 = $240,000

Earnings before taxes = $1,000,000 interest expense = $240,000

Earnings before taxes = $760,000 Taxes (40%) $304,000 = $456,000 Net Income