QUESTION 27

1. Sixco Tech began its operations in 2015 and sold 15,000 units of mobile phones at $250 per unit on opening year. Based on its 2015 income statement shown, Sixco had incurred total costs of $3,450,000, with total fixed operating costs of $850,000 and total interest expense of $125,000. What is Sixcos degree of financial leverage for its first year of operations?

	a.	1.12
	b.	1.71
	c.	2.40