The Sterling Tire Company's income statement for 2015 is as follows: STERLING TIRE COMPANY Income Statement Year ended December 31, 2015 $1,100,000 700,000 Sales (20,000 tires at $55 each) Less: Variable costs (20,000 tires at $35) 400,000 300,000 Contribution margin Less: Fixed costs Earnings before interest and taxes (EBIT) Interest expense 100,000 60,000 Earnings before taxes (EBT) Income tax expense (35%) 40,000 14,000 Earnings after taxes (EAT) $ 26,000 Given this income statement, compute the following: Degree of operating leverage. (Round the final answer to 2 decimal places.) DOLX Degree of financial leverage. (Round the final answer to 2 decimal places.) a. b. DFL c-1. Degree of combined leverage. (Do not round the intermediate calculations. Round the final answer to 2 decimal places.) DCL c-2. Using your answers to a. and b. calculate the percentage increase in EBIT and EBT from a 20 percent increase in sales volume. (Do not round the intermediate calculations. Round the final answers to 2 decimal places.) 26