Assume a Company produces luxury shoes. Currently, the company produces 12,000 products. The price per product is $500. Tax rate is 30% and the total number of shares is 1,000,000. The first column in the table below illustrates the current financial information. Number of products Sales Revenues Total Operating Expenses EBIT Interest Expenses Income Before Tax Tax Expenses Net Income EPS Current Situation 12,000 6,000,000 (4,000,000) 2,000,000 (500,000) 1,500,000 (450,000) 1,050,000 1.05 Project X 14,000 7 7 7 7 7 7 Project Y 18,000 7 2 7 2 7 7 7 7 Suppose the company has 2 options. 1. The company can apply project X where the number of products will be 14,000, fixed cost will equal $1,000,000 and the variable cost per product will be $250. If this project applied, it will be financed by loan where the total interest expenses will equal $750,000. 2. The company can apply project Y where the number of products will be 18,000, fixed cost will equal $2,000,000 and the variable cost per product will be $150. If this project applied, it will be financed by loan where the total interest expenses will equal $1,500,000. Assume the company can only apply one project, either X or Y. . Find the DOL and DFL for the company if project X applied, and of project Y applied (use current situation in each time). Explain the answers? . Based on your DOL and DFL answers, which project shall the company apply if its priority is to decrease the level of financial risk due to capital structure requirements. Explain you