Use the below information to answer the following question.

Sales (100,000 units)	$	1,000,000
Variable costs		300,000
Contribution margin		700,000
Fixed manufacturing costs		200,000
Operating income		500,000
Interest		75,000
Earnings before taxes		425,000
Taxes (30%)		127,500
Net income	$	297,500

Refer to the table. The degree of financial leverage is _____.

Multiple Choice

• 1.29x

• 4.20x

• 3.50x

• 1.18x