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Hickory Building Materials' current statement contains the following information (in millions): Sales$ 75.0 Less: Variable costs 40.0 Revenue before fixed costs35.0 Less: Fixed Costs 15.0

Hickory Building Materials' current statement contains the following information (in millions):

Sales$ 75.0

Less: Variable costs40.0

Revenue before fixed costs35.0

Less: Fixed Costs15.0

EBIT20.0

Less: Interest4.0

EBT16.0

Less: Taxes @ 40 percent6.4

Earnings After Tax $ 9.6

There are 3 million shares of common stock outstanding.

a)Calculate the Degree of Operating Leverage.

b)Calculate the Degree of Financial Leverage.

c)Calculate the Degree of Total Leverage.

d)A 5 percent increase in sales (at this base level) will result in what EPS ?

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