Phelps Canning Company is considering an expansion of its facilities. Its current income statement is as follows: Sales Lest variable expense (50% of sales) Fixed expense Earnings before Interest and taxes (EBIT) Interest (10% cost) Earnings before taxes (EBT) Tax (343) Earnings after taxes (LAT) Shares of common stock EPS 5. 2.See, 1,800, 700.000 200,000 500,000 170,000 330.000 200,000 1.65 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 $2 million in additional financing. His investment dealer has laid out three plans for him to consider 1. Sell $2 million of debt at 13 percent 2. Sell $2 million of common stock at $20 per share. 3. Sell $1 million of debt at 12 percent and S1 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 $2,300.000 per year. Mr. Phelps is not sure how much this expansion will add to sales, but he estimates that sales will rise by $1 million per year for the next five years. Mr. Phelps is interested in a thorough analysis of his expansion plans and methods of financing a. Compute the break-even point for operating expenses before and after expansion in sales dollars) (Enter your answers in dollars, not in million of dollars.) a. Compute the break even point for operating expenses before and after expansion (in sales dollars) (Enter your answers in dollars, not in million of dollars.) Break-even point before expansion Break-even point after expansion b. Compute the degree of operating leverage (DOL) before and after expansion. Assume sales of $5 million before expansion and $6 million after expansion (Round the final answer to 2 decimal places.) DOL before expansion DOL after expansson c. Compute the degree of financial leverage (DFL) before expansion at sales of $5 million and for all three methods of financing after expansion Assume sales of $6 million for the second part of this question (Round the final answer to 2 decimal places.) DFL before expansion DFL after expansion 100% Debt DFL after expansion 100% Equity DFL after expansion 50% Debt and Equity c. Compute the degree of financial leverage (DF) before expansion at sales of $5 million and for all three methods of financing after expansion. Assume sales of $6 million for the second part of this question (Round the final answer to 2 decimal places) DFL before expansion OIL after expansion 100% Debt OFL after expansion 100% Equity DEL after expansion sex Debt and Equity d. Compute EPS under all three methods of financing the expansion at $6 million in sales (first year) and $10 million in sales (last year) (Round the final answer to 2 decimal places.) Debt Equity $ $ Debt and Equity $ EPS for the first year EPS for the last year e. Select the method for financing the expansion that best suits Mr. Phelps'objective of maximizing shareholders' wealth flest method for financing before expansion Best method for financing after expansion (Click to select) (Click to select)