What Is the Fixed-Cost Expenditure for a Firm with a DOL

Multiple Choice

What is the fixed-cost expenditure for a firm with a DOL of 4.5 that generates pretax profits of $1 million and has $600,000 in depreciation expense?

A) $1.1 million
B) $2.1 million
C) $2.9 million
D) $3.9 million DOL = 1 +
4) 5 = 1 +
3) 5 =
$3) 5 million = fixed costs + $600,000