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Firm R has sales of 100,000 units at $1.98 per unit, variable operating costs of $1.73 per unit, and fixed operating costs of $6,000. Interest

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Firm R has sales of 100,000 units at $1.98 per unit, variable operating costs of $1.73 per unit, and fixed operating costs of $6,000. Interest is $10,170 per year. Firm W has sales of 100,000 units at $2.54 per unit, variable operating costs of $0.99 per unit, and fixed operating costs of $62,500. Interest is $17,200 per year. Assume that both firms are in the 40% tax bracket. The Degree of Financial Leverage for firm Ris: (rounded to 2 decimal places)

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