1. GAMESHOP CORP has provided the following information: Operating income in the coming year: $2.5 million Standard deviation: $800,000 Interest charges in the coming year: $1.2 million Preferred divided: $300,000 Marginal tax rate: 40% Assume that operating income is normally distributed, what is the probability that GAMESHOP will have negative EPS next year? (HINT: This problem requires you to consult the normal distribution table) (30 points) 2. SQUIBB, a pharmaceutical company has provided the following information for your analysis: Sales: $43 million Variable costs: $27.95 million Expected increase in sales in the coming year: 15% Fixed operating costs (constant): $9.1 million What is the degree of operating leverage for SQUIBB? (20 points)