Econco has the following income statement: Sales $250,000 (price 10 per unit) COGS 150,000 (vc is 6 per unit) GP 100,000 Fixed 60,000 Ebit 40,000 wwww a. What is the degree of operating leverage? (2) b. Econco is considering issuing some bonds (debt) to obtain some financial leverage. Econco currently has 10,000 shares outstanding. The debt carries an interest rate of 5% Option A issue 100,000 in debt and buy back 1000 shares Option B issue 200,000 in debt and buy back 2000 shares i. Calculate the EBIT indifference point between the two options? (4) II. At what level of sales would the EPS be the same for both options? (3) iii. At the current level of sales which option would yield the highest EPS? (2)