Below is the Income Statement for 2019 for Acme Gaming Company, use this for problems 12-3 and 12-4 Sales $50,450,000 Variable costs $25,875,000 Fixed Operating costs $15.900,000 EBIT $8,675,000 Interest Expense $1,735,000 EBT $6.940,000 Taxes (25%) $1.735.000 Net Income $5.205.000 Earnings Per Share $921 (there are 300,000 shares outstanding) Firm's operating leverage - 2.8 Firm's finacial leverage - 1.3 12-3 If sales increase by 15%, by what percentage wil EBIT change? 124 If EBIT were to increase by 42%, but what percentage will EPS change? True or False: A company that sells common stock and uses the money to pay off a loan is increasing its use of financial leverage. 12-6 A firm that uses large amounts of debt financing in an industry characterized by a high degree of business risk would have earnings per share fluctuations resulting from changes in levels of sales. a) no b) constant c) large d) small