XYZ company expects in the coming year: sales of 40000 units at $10 per unit, variable operating costs of $4 per unit, fixed operating costs of $30000, interest of $50000, and preferred stock dividends of $24000. The Company is in the 40% tax bracket.

a. Compute the following and explain their meaning:

1- Degree of Operating Leverage (DOL).

2- Degree of Financial Leverage (DFL).

3- Degree of Total Leverage (DTL).