Need help with this please.

Atech has fixed costs of $4.2 million and profits of $2 million. Its competitor, ZTech, is roughly the same size and this year earned the same profits, $2 million. However, ZTech operates with fixed costs of $1.10 million and lower variable costs.

a. Calculate the operating leverage for each firm. (Round your answers to 2 decimal places.)

DOL ATech
DOL ZTech

b. Which firm will likely have higher profits if the economy strengthens?

• ATech

• ZTech