King Lyon has the following assets: Current assets Capital assets $3,340,000 8,200,000 Total assets $11,540,000 During 4 months of the year, current assets drop to $1,700,000 (total assets will then be $9,900,000). Its operating profit (EBIT) is expected to be $500,500. Its tax rate is 20 percent. Shares are valued at $15. Its capital structure is short-term financing at 3 percent and long-term financing of 40 percent equity, 60 percent debt at 4 percent. a. Calculate expected EPS if the firm is perfectly hedged. (Do not round intermediate calculations and round your final answer to 2 decimal places.) EPS $ Eli Lilly is very excited because sales for his nursery and plant company are expected to increase from $740,000 to $1,380,000 next year. Eli's net assets (assets liabilities) will remain at 50 percent of sales. His firm will enjoy an 6 percent return on total sales. He will begin the year with $130,000 in the bank and is already bragging about the Jaguar and luxury townhouse he will buy. a. Does his optimistic outlook for his cash position appear to be justified? O Yes No b. Compute the likely cash balance for the end of the year. (Negative answers should be indicated by a minus sign.) Cash balance $