hapter 5 The Sterling Tire Company's income statement for 20XX is as follows: STERLING TIRE COMPANY Income Statement Year ended December 31, 20xx Sales (25, 000 tires at 540 each $1,000,000 Lees: Variable costs (25,000 tires at $15) 375,000 625,000 500,000 125,000 75,000 Contribution margin Lens: Fixed costs Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Income tax expense (329) Earnings after taxes (ET) 50,000 16,000 34,000 Given this income statement, compute the following: 8. Degree of operating leverage. (Round the final answer to 2 decimal places.) ces DOL b. Degree of financial leverage. (Round the final answer to 2 decimal places.) DFL C-1. Degree of combined leverage. (Do not round the Intermediate calculations. Round the final answer to 2 decimal places.) DCL c-2. Using your answers to a. and b. calculate the percentage increase in EBIT and EBT from a 20 percent increase in sales volume. (Do not round the Intermediate calculations. Round the final answers to 2 decimal places.) EBIT c-3. Does financial or operating leverage have the greater Impact? O DEL ODOL d. Break-even point in units. (Round the final answer to the nearest whole number.) Break-even point tires e. Break-even point considering the interest expense as a fixed cost. Break-even point tires