Question 4 a) NTT Toys produces inflatable beach balls, selling 400,000 balls per year. Each ball produced has a variable operating cost of $0.84 and sells for $1.00. Fixed operating costs are $28,000. The firm has annual interest charges of $6,000, preferred dividends of $2,000, and a 40% tax rate. i. Calculate the operating breakeven point in units. (3 marks) ii. Compute the degree of operating leverage. (6 marks) iii. Compute the degree of financial leverage. (6 marks) b) Debt financing and common stock financing are the two types of long-term financing used by the family-controlled firms in Asia to finance long-term projects. Critically explain any TWO (2) advantages of debt financing and any TWO advantages of common stock financing. (10 marks)