Appliance Company makes cooling fans. The firm’s income statement is as follows: Sales (7,000 fans at $20) - $140,000. Less: Variable costs (7,000 fans @ $8) - 56,000. Fixed Costs - 44,000. Earnings before interest and taxes (EBIT) - 40,000. Less: Interest (I) - 10,000. Earnings before taxes (EBT) - 30,000. Less: Taxes (T) - 6,000. Earnings after taxes (EAT) - $24,000. How much is the degree of financial leverage?

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