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Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of tile for the home-building industry. Their financial information is as follows: Capital
Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of tile for the home-building industry. Their financial information is as follows: Capital Structure Debt @ 10% Common stock, $10 per share Sinclair $660,000 440,000 Boswell 0 $1,100,000 $1,100,000 $1,100,000 Common shares 44,000 110,000 Operating Plan Sales (51,000 units at $15 each) Less: Variable costs $765,000 612,000 ($12 per unit) 0 $765,000 306,000 ($6 per unit) 301,000 Fixed costs Earnings before interest and taxes (EBIT) $153,000 $ 158,000 a. If you combine Sinclair's capital structure with Boswell's operating plan, what is the DCL? (Round the final answer to 2 decimal places.) DCL b. If you combine Boswell's capital structure with Sinclair's operating plan, what is the DCL? (Round the final answer to 2 decimal places.) DCL X d. In part b, if sales double, by what percentage will EPS increase? EPS will increase by %
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