1-) Papers co. generates 10,000,000 in sales. Its variable costs equal 85.00% of sales and its fixed costs are 500,000. Therefore, the company's operating income (EBIT) equals 1,000,000. The company estimates that if its sales were to increase 9.5%, its net income would increase 17.50%.

Income tax rate is 35%.

What is the company's interest expense? Build the Income statement, do not round intermediate calculations and present them all.

1.2-) Assume that a firm currently has EBIT of 2,000,000, a degree of total leverage of 6.000, and a degree of financial leverage of 1.875. If sales decline by 20% next year, then what will be the firm's expected EBIT in one year? Do not round intermediate calculations.

1.3-) Given the following information, answer the following questions.

Total Revenue = 3Q Total Costs = 1,500 + 2Q

a) What is the break-even level of output? (0,5v) b) If the firm sells 1,300 units, what are its earnings or losses? (0,5v) c) If sales rise to 2,000 units, what are the firm's earnings or losses? (0,5v) d) If the total cost equation were TC = 2,000 + 1.80Q what happens to the break-even level of output units?