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XYZCo is opening their new business next month. They have provided the following information: Variable Costs =35% of sales Fixed Costs =360,000 Ist Years Sales

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XYZCo is opening their new business next month. They have provided the following information: Variable Costs =35% of sales Fixed Costs =360,000 Ist Years Sales est. =1,050,000 Startup Costs =1,800,500 Two Financing Options: 1) 60% Equity Financing and 40% Debt at 13% 2) 100% Equity - Common Stock can be sold at $4.50 per share A) Compute break-even point. B) Compute DOL. C) Compute DFL and DCL for both financing plans

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