i need help with the calculations from Questions A TO D. I need explanation plus Answers thanks.
Phelps Canning Company is considering an expansion of its facilities. Its current income statement is as follows Sales 5,800, pee Less: Variable expense (Set of sales) Fixed mponse Earnings before interest and taxes ((BIT) Interest (18% cost) Earnings before taxes (LOT) 500, FOR Tax (MT) Earnings after taxes (EAT) 338, 685 Shares of common stock EPS 1.45 Phelps Canning Company is currently financed with 50 percent debt and 50 percent equity (common stock). To expand facilities, Mr. Phelps estimates a need for $2 million in additional financing. His Investment dealer has laid out three plans for him to consider. 1. Sell $2 million of debt at 13 percent 2. Sell $2 million of common stock at $20 per share. 3. Sell $1 million of debt at 12 percent and $1 million of common stock at $25 per share Variable costs are expected to stay at 50 percent of seles, while fixed expenses will increase to $2 300,000 per year, Mc. Phelps 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, Mr. Phelps is interested in a thorough analysis of his expand ion plans and methods of financing a. Compute the break even point for operating exp ses before and after expansion (in sales dollars), (Enter your answers In dollars, not In million of dollars.) Break even point before ampariston Break-even polat after expansion b. Compute the degree of operating leverage (DOL) before and after expansion. Assume sales of $5 million before expansion and $6 million after expansion. (Round the final answer to 2 decimal places.) DOL before expansion DOK after expansion c. Compute the degree of financial leverage (DFL) before expansion at sales of $5 million and for all three methods of financing after expansion. Assume sales of $6 million for the Second part of this question. (Round the final answer to 2 decimal places.) Of L be Fore expansion DFL after expansion 109% Cept DEL after expansion ties Equity DFL after expansion bin babe and Equity d. Compute EPS under all three methods of financing the expansion at 56 million in sales (first year) and $10 million in sales (last year). (Round the final answer to 2 decimal places.) Debt and Equity EPS for the first year ups for the last year