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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:
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 Sinclair Boswell Debt @ 11% $1,440,000 Common stock, $10 per share 960,000 $2,400,000 $2,400,000 $2,400,000 Common shares 96,000 Operating Plan Sales (64,000 units at $20 each) $1,280,000 Less: Variable costs 1,024,000 ($16 per unit) Fixed costs Earnings before interest and taxes (EBIT) 0 $256,000 240,000 $1,280,000 640,000 ($10 per unit) 314,000 $326,000 a. If you combine Sinclair's capital structure with Boswell's operating plan, what is the DCL? b. If you combine Boswell's capital structure with Sinclair's operating plan, what is the DCL? c. This part of the question is not part of your Connect assignment. d. In part b, if sales double, by what percentage will EPS increase?
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