Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of brick for the homebuilding industry. Their financial information is as follows:

Need help with Parts A, B and C

	Sinclair			Boswell
Capital Structure
Debt at 12%	$	1,320,000			0
Common stock, $10 per share		880,000		$	2,200,000
Total	$	2,200,000		$	2,200,000
Common shares		88,000			220,000
Operating Plan:
Sales (62,000 units at $25 each)	$	1,550,000		$	1,550,000
Variable costs		1,116,000			744,000
Fixed costs		0			312,000
Earnings before interest and taxes (EBIT)	$	434,000		$	494,000

The variable costs for Sinclair are $18 per unit compared to $12 per unit for Boswell.

a.	If you combine Sinclairs capital structure with Boswells operating plan, what is the degree of combined leverage? (Round your answer to 2 decimal places.)

Degree of combined leverage

b.	If you combine Boswells capital structure with Sinclairs operating plan, what is the degree of combined leverage? (Round your answer to the nearest whole number.)

Degree of combined leverage

c.	In part b, if sales double, by what percentage will EPS increase? (Round your answer to the nearest whole percent.)

EPS will increase by

%