Homework: 4-1 MyFinanceLab Homework: Capital Structure and C Save Score: 0 of 3 pts 13 of 15 (12 complete) HW Score: 77.5%. 31 of 40 pts B15-11 (book/static) Question Help (Leverage and EPS) You have developed the following pro forma income statement for your corporation: . It represents the most recent year's operations, which ended yesterday. Your supervisor in the controller's office has just handed you a memorandurri asking for written responses to the following questions: a. If sales should increase by 25 percent, by what percent would earnings before interest and taxes and net Income Increase? b. If sales should decrease by 25 percent, by what percent would earnings before interest and taxes and net income decrease? c. If the firm were to reduce its reliance on debt financing such that interest expense were cut in half, how would this affect your answers to parts a and b? a. If sales should increase by 25%, the percentage change in earnings before interest and taxes is % (Round to two decimal places.) Data Table Sales $ 45,750,000 (22,800,000) Variable costs Revenue before fixed costs 22,950,000 (9,200,000) Fixed costs EBIT $ 13,750,000 (1,350,000) Interest expense Earnings before taxes Taxes (50%) $ 12,400,000 16,200,000) 6,200,000 Enter your answer in the answer box and then click Check Answer. Net income