The following information pertains to the Ravioli Restaurant chain: Sales RM400,000 Variable costs 150,000 Total contribution margin 250,000 Fixed costs 50,000 Earnings before interest and taxes (EBIT) 200,000 Interest expense 20,000 Earnings before taxes 180,000 Taxes (28 percent) 50,400 RM130,600 Required: Net income a) Calculate the degree of operating leverage, degree of financial leverage and degree of combined leverage. b) c) (3 Marks) If EBIT increase by 12 percent next year, estimate the percentage increase in EPS? (2 Marks) If sales increase by 10 percent, what will be the new level of EPS if the firm has 100,000 shares outstanding? (5 Marks)