-The Degree of Combined Leverage Is:
A) 2

Multiple Choice

$\begin{array}{lr}\text { Sales }(75,000 \text { units }) & \$ 750,000 \\\text { Variable costs } & \underline{225,000} \\\text { Contribution margin } & 525,000 \\\text { Fixed manufacturing costs } & \underline{187,500}\\\text { Operating income } & 337,500 \\\text { Interest } & \mathbf{7 5 , 0 0 0} \\\text { Earnings before taxes } & 262,500 \\\text { Taxes (at } 31 \% \text { ) } & 81.375\\\text { Net income }&\$181,125\\\text { Shares outstanding }&15,000\end{array}$
-The Degree of Combined Leverage is:

A) 2.1x.
B) 1.9x.
C) 2.9x.
D) 2.0x.