Golf Course Sensors (GCS) is now up and running and has created financial models and budgets for next year. GCS is forecast to sell 1,000 robots next year each at a price of $15K each. The company expects to incur variable costs at 43% of revenues. And the company has forecast fixed costs including depreciation at $4.2M next year. The company pays taxes at 20% and has no debt.

a) Based on these assumptions, what is the forecast pre-tax operating income?

b) Based on these assumptions, what is the companys degree of operating leverage?