QUESTION 1- Business risk, Financial risk and Combined risk Your friend Johnson has just won a lottery jackpot of R100 000. He has decided to invest the total amount for two years, in a company that will give him a better return. Johnson approached his broker, and the broker provided him with the information below Company A 10 000 units10 000 units R1 000 000 R 250 000 R 750 000 R 500 000 Company B Units sold Sales R1 000 000 R 500 000 R 500 000 R 250 000 Less: Variable Costs Contribution Less: Fixed costs Earnings before Interest and Tax R 250 000 R 250 000 The broker is certain that the economy will do well in the next four consecutive years Because of the future outlook, both companies are expecting to increase their sales value by 100% in each year. Johnson is confused as to which company to invest in as they both have the same earnings before interest and tax. Required: 1. Calculate the Degree of Operating Leverage for Company A and B 2. Calculate the Degree of Financial Leverage for Company A and B 3. Calculate the break-even point for Company A and B