Phelps Canning Company is considering an expansion of its facilities. Its oument income statement is as follows: $6,100,000 Less: Variable expense (50% of sales) Fbed expense 1,910,000 Earnings before interest and taxes (EBIT) 1,140,000 420,000 Interest (10% cost) Earnings before taxes (EBT) 720,000 288,000 Tax (40%) $432,000 Earnings after taxes (EAT) 310.000 of common stock $1.39 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 $3.1 million in additional financing. His investment dealer has laid out three plans for him to consider: 1 Sell $3.1 million of debt at 13 percent. 2 Sell $3.1 million of common stock at $20 per share, 3.Sell $1.55 million of debt at 12 percent and $1.55 million of common stock at $25 per share. Variable costs are expected to stay at 50 percent of sales, while fixed expenses will increase to $2,410,000 per year. Mr. Phelps is not sure how much this expansion will add to sales, but he estimates that sales will rise by $1.55 million per year for the next five years. Mr. Phelps is interested in a thorough analysis of his expansion plans and methods of financing. He would like you to analyze the following: a. The break-even point for operating expenses before and after expansion (in sales dollars), (Enter the answers in dollars not in millions.) Break-even point Before expansion S After expansion b. The DOL before and after expansion. Assume sales of $6.1 million before expansion and $7.1 million after expansion. (Round the final answers to 2 decimal places.) Before expansion After expansion c-1. The DFL before expansion. (Round the final answers to 2 decimal places.)