Problem 5-23 4 Phelps Canning Company is considering an expansion of its facilities. Its current income statement is as follows 25 Boots Sales Less Variable expense (501 o sales) Fixed expose Lars before interest and taxes on Interest (10% cost) 35,000,000 2.500,00 1,00 700,00 ting before ta (7) 17. tanar taxes 3 oo Share On 200. Prielo Canning company to current financed with 50 percent destone percent equity common stock). To expand focus Phelps estimates a need for $2 milion in addition and investment dealer hos od out three pans form to consider Ses 52 mision of det 13 percent 2. Sell 52 million of common tocat 20 perche 2. S1 million of debt 12 percent and not common stock 8 525 Der har Valoble costs are expected to stay at 50 percent to while fixed expenses will increase to 52.300.000 per year Pelos non Gure how much this consion will add to cal but he is that sales will se By Simon per year for the next five years Mr Printerested in morough Dysponon non methods of financing He would you to anyone 4 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 After expansion 25 poi b. The DOL before and after expansion Assume sales of $5 milion before expansion and $6 million after expansion (Round the final answers to 2 decimal places.) DOM before expansion After wpansion Pine 01. The DFL before expansion at sales of $5 million (Round the final answer to 2 decimal places) DFL france 02. The DFL for all three methods of financing after expansion Assumo color 56 million (Round the final answers to 2 decimal pieces.) DEL d. Compute EPS under all three methods of financing the expansion at $6 million in sales (first year) and S10 million in sales cast year (Round the final answers to 2 decimal places) 10 Det 5