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

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Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of brick for the homebuilding industry. Their financial information is as follows: Sinclair Boswell Capital Structure Debt @ 114 Common stock, $10 per share Total Common shares $ 900,000 @ 600,000 $1,500,000 $1,500,000 $1,500,000 60,000 150,000 Operating plan Sales (55,000 units at $20 each) Variable costs Fixed costs Earnings before interest and taxes (EBIT) $1,100,000 880,000 $1,100,000 550,000 305,000 $ 245,000 $ 220,000 The variable costs for Sinclair are $16 per unit compared to $10 per unit for Boswell. a. If you combine Sinclair's capital structure with Boswell's operating plan, what is the degree of combined leverage? (Round your answer to 2 decimal places.) Degree of combined leverage b. If you combine Boswell's capital structure with Sinclair's 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 earnings per share (EPS) increase? (Round your answer to the nearest whole percent.) EPS will increase by %

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