rm A has $10,400 in assets entirely financed with equity. Firm B also has $10,400 in assets, but these assets are financed by $5,200 in debt (with a 15 percent rate of interest) and $5,200 in \$uity. Both firms sell 15,000 units of output at $2.50 per unit. The variable costs of production are $1, and fixed production costs are $15,000. (To ease the calculation, assume no income tax.) a. What is the operating income (EBIT) for both firms? Round your answers to the nearest dollar. Firm A: $ Firm B: $ b. What are the earnings after interest? Round your answers to the nearest dollar. Firm A: $ Firm B: \$ c. If sales increase by 20 percent to 18,000 units, by what percentage will each firm's earnings after interest increase? To answer the question, determine the earnings after taxes and compute the percentage increase in these earnings from the answers you derived in part b. Round your answers to one decimal place. FirmA:FirmB:%% d. Why are the percentage changes different? The answers differ because Firm A uses when sales expand. while Firm B uses The successful use of magnifies the percentage increase in earnings Firm A has $10,400 in assets entirely financed with equity. Firm B also has $10,400 in assets, but these assets are financed by $5,200 in debt (with a 15 percent rate of interest) and $5,200 in equity. Both firms sell 15,000 units of output at $2.50 per unit. The variable costs of production are $1, and fixed production costs are $15,000. (To ease the calculation, assume no income tax.) a. What is the operating income (EBI) for both firms? Round your answers to the nearest dollar. Firm A: \$ Firm B: \$ b. What are the eamings after interest? Round your answers to the nearest dollar. Firm A: \$ Firm B: \$ c. If sales increase by 20 percent to 18,000 units, by what percentage will each firm's earnings after interest increase? To answer the question, determine the earnings after taxes and compute the percentage increase in these earnings from the answers you derived in part b. Round your answers to one decimal place. FirmA:FirmB:%% d. Why are the percentage changes different? The answers differ because Firm A uses when sales expand. while Firm B uses: . The successful use of magnifies the percentage increase in earnings fuity. Both firms sell 15,000 units of output at $2.50 per unit. The variable costs of production are $1, and fixed production costs are $15,000. (To ease the calculation, assume no income tax.) a. What is the operating income (EBIT) for both firms? Round your answers to the nearest dollar. Firm A: $ Firm B: \$ b. What are the earnings after interest? Round your answers to the nearest dollar. Firm A: \$ Firm B: \$ c. If sales increase by 20 percent to 18,000 units, by what percentage will each firm's earnings after interest increase? To answer the question, determine the earnings after taxes and compute the percentage increase in these earnings from the answers you derived in part b. Round your answers to one decimal place. FirmA:FirmB:%% d. Why are the percentage changes different? The answers differ because Firm A uses while Firm B uses The successful use of magnifies the percentage increase in earnings when sales expand