Alvarez Technologies Has Sales of $3,000,000

Multiple Choice

Alvarez Technologies has sales of $3,000,000.The company's fixed operating costs total $500,000 and its variable costs equal 60% of sales,so the company's current operating income is $700,000.The company's interest expense is $500,000.What is the company's degree of total leverage (DTL) ?

A) 4.8870
B) 5.1443
C) 5.4150
D) 5.7000
E) 6.0000