In 2019, Alafaya had sales of $950,000 and paid taxes of $84,000. Because of the low interest rate environment, the firm also borrowed some money from the local bank and paid $40,000 in interest expense. In addition, the firm incurred Variable Costs and Fixed Costs of $270,000 and $400,000 respectively. If operating income increases by 7%, what should be the increase in earnings per share?

7.0%

8.17%

19.83%

17.0%

2.83%