Financial leverageMax Small has outstanding school loans that require a monthly payment of $1,100. He needs to buy a new car for work and estimates that this purchase will add

$349 per month to his existing monthly obligations. Max will have $3,040 available after meeting all of his monthly living (operating) expenses. This amount could vary by plus or minus 10%.

a. To assess the potential impact of the additional borrowing on his financial leverage, calculate the DFL in tabular form for both the current and proposed loan payments using Max's available

$3,040 as a base and a 10% change.

b. Can Max afford the additional loan payment?

c. Should Max take on the additional loan payment?