The following information pertains to the Classic Burger Restaurant chain:

Sales $$600,000$

Variable costs $300,000$

Fixed costs $100,000$

EBIT $200,000$

Interest expense $50,000$

Earnings before taxes $150,000$

Taxes $(30\%)45,000$

Net income $$105,000$

a$.$ If sales increase by $10\%,$ what will be the new level of EPS if the firm

has $100,000$ shares outstanding?

b$.$ What is the percentage increase in EPS? Explain the difference

between the percentage increase in sales and the percentage increase

in EPS.