"monterrey corporation has an existing loan in the amount of $7 million with an annual interest rate of 6.5%. the company provides an internal company-prepared financial statement to the bank under the loan agreement."

Carlton industries is considering a new project that they plan to price at $74.00 per unit. the variable costs are estimated at $39.22 per unit and total fixed costs are estimated at $12,085. the initial investment required is $8,000 and the project has an estimated life of 4 years. the firm requires a return of 8 percent. ignore the effect of taxes. what is the degree of operating leverage at the financial break-even level of output?