An analyst has developed an estimate of the earnings per share for her firm for the next year using the following parameters.

Sales	$20 million
Cost of goods sold	70% of sales
General & administrative expenses	$300,000
Selling expense	$100,000 plus 10% of sales
Debt outstanding	$5 million at 8% interest rate
Effective tax rate	35%
Common shares outstanding	2 million

She is now interested in the sensitivity of earnings per share to sales forecast changes. A 10% sales increase would increase earnings per share by

A.

7.0 cents per share.

B.

10.4 cents per share.

C.

13.0 cents per share.

D.

20.0 cents per share.