Deling Canning Company is considering an expansion of its facilities. Its current income statement is as follows: Sales Variable costs of sales) Fixed costs tarning before interest and taxes (EET) Interest (10% cost) tanning before tes (ET) Tax (0) Earning after taxes (LAT) Shares of common stock Warnings per share 55,500,000 2.750,000 1.350.000 5 300,000 5 600.000 240. 5 M60,000 250,000 1.4 The company is currently financed with 50 percent debt and 50 percent equity (common stock, par value of 510) in order to expand the facilities, Mi Delsing estimates a need for $25 million in additional financing His investment banker has told out three plans for him to consider 1. Sell $2.5 million of debt at 13 percent 2.Sell $2.5 million of common stock at $20 per share 3.Sell $125 million of debt at 12 percent and $125 million of common stock at $25 per share. Variable costs are expected to stay at 50 percent of sales, while fixed expenses will increase to $2,350,000 per year. Delsing is not sure how much this expansion will add to sales, but he estimates that sales will rise by S1 million per year for the next five years. Detsing is interested in a thorough analysts of his expansion plans and methods of financing He would like you to analyze the following a. The break even point for operating expenses before and after expansion on sales dollars) (Enter your answers in dollors not in millions. Le $1,234,567.) Break Even Point Before expansion After expansion b. The degree of operating leverage before and after expansion. Assume sales of $55 million before expansion and 565 million after expansion. Use the formula DOL - (S-TVO (S-TVC-FCI (Round your answers to 2 decimal places.) Degree of Operating Leverage Before expansion After expansion c-1. The degree of financial leverage before expansion (Round your answer to 2 decimal places.) Degree of financial leverage c-2. The degree of financial teverage for all three methods after expansion Assume sales of $6.5 million for this question (Round your answers to 2 decimal places.) Degree of Financial Leverage 100% Debt 100% Equity 50% Debt 8 50% Equity d. Compute EPS under all three methods of financing the expansion at $6.5 million in sales (first year) and $10.5 million in sales (last year(Round your answers to 2 decimal places) Earnings por Share First Year Last Year 100% Debt 100% Equity 50% Debt & 50% Equity