Delsing Canning Company is considering an expansion of its facilities. Its current income statement is as follows: Sales $ 7,200,000 Variable costs (50% of sales) 3,600,000 Fixed costs 2,020,000 Earnings before interest and taxes (EBIT) $ 1,580,000 Interest (10% cost) 640,000 Earnings before taxes (EBT) $ 940,000 Tax (35%) 329,000 Earnings after taxes (EAT) $ 611,000 Shares of common stock 420,000 Earnings per share $ 1.45 The company is currently financed with 50 percent debt and 50 percent equity (common stock, par value of $10). In order to expand the facilities, Mr. Delsing estimates a need for $4.2 million in additional financing. His investment banker has laid out three plans for him to consider: Sell $4.2 million of debt at 12 percent. Sell $4.2 million of common stock at $20 per share. Sell $2.10 million of debt at 11 percent and $2.10 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 $2,520,000 per year. Delsing is not sure how much this expansion will add to sales, but he estimates that sales will rise by $2.10 million per year for the next five years. Delsing is interested in a thorough analysis 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 (in sales dollars). (Enter your answers in dollars not in millions, i.e, $1,234,567.) b. The degree of operating leverage before and after expansion. Assume sales of $7.2 million before expansion and $8.2 million after expansion. Use the formula: DOL = (S TVC) / (S TVC FC). (Round your answers to 2 decimal places.) c-1. The degree of financial leverage before expansion. (Round your answers to 2 decimal places.) c-2. The degree of financial leverage for all three methods after expansion. Assume sales of $8.2 million for this question. (Round your answers to 2 decimal places.) d. Compute EPS under all three methods of financing the expansion at $8.2 million in sales (first year) and $10.0 million in sales (last year). (Round your answers to 2 decimal places.)