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I need all parts andwered b. The degree of operating leverage before and after expansion. Assume sales of $5.8million before expansion and $6.8million after expansion,
I need all parts andwered
b. The degree of operating leverage before and after expansion. Assume sales of $5.8million before expansion and $6.8million after expansion, Use the formula: DOL=(STVCFC)(STVC). Note: Round your answers to 2 decimal places. c-1. The degree of financial leverage before expansion. Note: Round your answer to 2 decimal places. c-2. The degree of financial leverage for all three methods after expansion. Assume sales of $6.8 million for this question, Note: Round your answers to 2 decimal places. Delsing Canning Company is considering an expansion of its facilities. Its current income statement is as follows: 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 $2.8 million in additional financing. His investment banker has laid out three plans for him to consider: 1. Sell $2.8 million of debt at 10 percent. 2. Sell $2.8 million of common stock at $20 per share. 3. Seil $1.40 million of debt at 9 percent and $1.40 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 $2,380,000 per year. Delsing is not sure how much this expansion will add to sales, but he estimates that sales will rise by $1 million 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). Note: Enter your answers in dollars not in millions, i.e, \$1,234,567. c.2. The degree of financlal leverage for all three methods after expansion. Assume sales of $6.8 million for this question. Note: Round your answers to 2 decimal places. d. Compute EPS under all three methods of financing the expansion at $6.8 million in sales (first year) and $10.8 million in sales (fast year). Note: Round your answers to 2 decimal places Step by Step Solution
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