Delsing Canning Company is considering an expansion of its facilities. Its current Income statement is as follows: Sales Variable costs (se% of sales) Fixed costs Earnings before interest and taxes (EBIT) Interest (19% cost) Earnings before taxes (EBT) Tax (30%) Earnings after taxes (EAT) Shares of common stock Earnings per share $ 7,488,eee 3,700,000 2,840,00 $1,660, eee 688,000 $ 988,eee 294, eee $ 686,080 448, eee $ 1.56 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 $4.4 million in additional financing. His Investment banker has laid out three plans for him to consider: 1. Sell $4.4 million of debt at 14 percent. 2. Sell $4.4 million of common stock at $20 per share. 3. Sell $2.20 milion of debt at 13 percent and $2.20 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 $2,540,000 per year. Delsing is not sure how much this expansion will add to sales, but he estimates that sales will rise by $1 milion 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, l.e, $1,234,567.) Break-Even Point Before expansion After expansion b. The degree of operating leverage before and after expansion. Assume sales of $7.4 million before expansion and $8.4 millon after expansion. Use the formula: DOL = (S-TVO)/(S-TVC-FC). (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 leverage for all three methods after expansion. Assume sales of $8.4 million for this question. (Round your answers to 2 decimal places.) Degree of Financial Leverage 100% Debt 100% Equity 50% Debt & 50% Equity d. Compute EPS under all three methods of financing the expansion at $8.4 million in sales (first year) and $10.2 million in sales (last year). (Round your answers to 2 decimal places.) Earnings per Share First Year Last Year 100% Debt 100% Equity 50% Debt & 50% Equity