Please answer the following question

3. Merville Corporation will begin operations next year to produce a single product at a price of $12 per unit. Merville has a choice of two methods of production: Method A with variable costs $6.75 per unit and fixed operating costs of $675,000; and Method B with variable costs $8.25 per unit and fixed operating costs of $401,250. To support operations under each production method, the firm requires $2,250,000 in assets, its cost of debt is 10% and its debt ratio is 40%. a. The sales forecast for the coming year is 200,000 units. Under which method would EBIT be more adversely affected if sales did not reach the expected levels? b. Given the firm's present debt, which method would produce the greater percentage increase in EPS for a given increase in EBIT? c. Calculate DTL and comment on the total risk of the company. d. Is there some debt ratio under method A that would produce DTLof A equal to DTL of B