Question 2. ILI corporation manufactures surgical masks. The corporation has spent $38m in fixed production costs (excluding depreciation cost). Each box of surgical masks costs $4.45 to produce, and given the high demand for these masks, the ILI plans to sell each box for $17.45. There is $3.8m depreciation cost every year. The corporate tax rate is 40%. ( 25 marks) a) The sales and marketing team have prepared the following table to provide management with potential scenarios for sales. What is the DOL when sales levels are optimistic? (4 marks) b) If there is 10% decrease in sales, what is corresponding change in ILI's EBIT? (4 marks) ILI is currently fully equity funded. However, the managers are considering levering up the firm to reach aED=0.9. The following table shows the financial situation of the firm with and without leverage. Financial Situation of It