The Norman Automatic Mailer Machine Company is planning to expand production. The expansion will cost $2,000,000, which can either be financed by bonds at an interest rate of 12 percent or by selling 40,000 shares of common stock at $50 per share. The current income statement before expansion is as follows: NORMAN AUTOMATIC MAILER Income Statement Year Ended Dec. 31, 20xx Sales $3,000,000 Variable costs (40%) 1,200,000 Contribution margin Fixed costs 1,800,000 800,000 EBIT Interest expense 1,000,000 400,000 Earnings before taxes Taxes @ 34% 600,000 204,000 Earnings after taxes $ 396,000 Shares EPS 100,000 $3.96 After the expansion, sales are expected to increase by $1,500,000. Variable costs will remain at 40 percent of sales, and fixed costs will increase by $550,000. The tax rate is 34 percent. a. Calculate the following before expansion. (Do not round the intermediate calculations. Round the final answers to 2 decimal places.) Before Expansion 1.80 x DOL DFL 1.67| X 3.0 x DCL b. Construct the income statement for the two financial plans. (Input all answer as positive values. Round EPS answers to 2 decimal places.) Debt Equity Sales Variable costs (40%) Fixed Costs EBIT Interest EBT Taxes @ 34% EAT (Net Income) Common Shares EPS $ $ c. Calculate the following after expansion. (Do not round the intermediate calculations. Round the final answers to 2 decimal places.) After Expansion Debt Equity DOL x X DFL DCL d. Calculate the EBIT/EPS indifference point with the formula. EBIT