PQR Manufacturing Corporation has $1,500,000 in debt outstanding. The company's before-tax cost of debt is 10%. Sales for the year totaled $3,500,000 and variable costs were 60% of sales. Net income was equal to $600,000 and the company's tax rate was 30%. If PQR's degree of total leverage is equal to 1.30, what is its degree of operating leverage? Donotroundintermediatecalculations.
A. 0.8962
B. 1.2281
C. 1.0179
D. 1.3719
E. 1.1064
Answer: E
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