Lambda, Inc. has a base level of sales of 150,000 units. Sales price per unit is $10.00 and variable cost per unit is $6.50. Total annual operating fixed costs are $155,000, and the annual interest expense is $90,000. (For consistency with answers below, carry all calculations to two decimals.)

Assume that Lambda expects units sold to increase 20%. What will be the resulting percentage change in EBIT?

Select one:

a. 20%

b. 28%

c. 31%

d. 36%