8. Financial leverage The following is a list of selected information for Liverpool Co. for the fiscal year. Forecasted Operations Sales with 80.00% Increase Unit Change 80 100 180 3,465.00 1,715.00 Sales in units (millions) Earnings before interest and taxes (EBIT) Less: Interest Earnings before taxes Less: Taxes (40%) 1,750.00 (175.00) (175.00) (0.00) $1,575.00 $3,290.00 $1,715.00 630.00 1,316.00 1,974.00 (0.00) 1,029.00 Net income 945.00 Earnings per share (20 million shares) $47.25 $98.70 $51.45 You are an employee for Liverpool Co., and your boss needs help assessing the level of risk associated with the firm's current financial position. Begin by calculating the degree of financial leverage for the change between forecasted operations and the operational increase of 80.00%. 1.11% 0.29X 0.60X Net income 945.00 1,974.00 1,029.00 Earnings per share (20 milion shares) $47.25 $98.70 $51.45 You are an employee for Liverpool Co., and your boss needs help assessing the level of risk associated with the firm's current financial position. Begin by calculating the degree of financial leverage for the change between forecasted operations and the operational increase of 80.00%. 1.11x 0.29% 0.60X 1.05X Your boss says, "Looking good so far. However, I would like to know how we stack up against our strongest competitor, Everton Co." Compare the degree of operating leverage of Everton Co. with that of Liverpool Co. and then answer the following question All else being equal, is Liverpool Co. more risky than, less risky thon, or as equally risky as Everton Co., considering that the degree of financial leverage for Everton Co. is 17 Not enough information given More risky Less risky