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Last year, Cayman Corporation had sales of $ 2 9 million, total variable costs of $ 1 5 million, and total fixed costs of $

Last year, Cayman Corporation had sales of $29 million, total variable costs of $15 million, and total fixed costs of $5,000,000. In addition, they paid $3 million in interest to bondholders. Cayman has a marginal tax rate of 21 percent. If Cayman's sales increase by 15%, what should be the increase in operating income? SET YOUR CALCULATOR TO 4 DECIMAL PLACES THEN ROUND TO 2 DECIMAL PLACES AT THE END. DO NOT ENTER THE % SIGN. FOR EXAMPLE, IF YOUR ANSWER IS 12.7125, ENTER IT AS 12.71.

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