The Sterling Tire Company's income statement for 20XX is as follows: STERLING TIRE COMPANY Income Statement Year ended December 31, 20XX Sales (50,000 tires at $65 each) Less: Variable costs (50,000 tires at $40) $ 3,250,000 2,000,000 Contribution margin Less: Fixed costs 1,250,000 1,050,000 Earnings before interest and taxes (EBIT) Interest expense 200,000 75,000 Earnings before taxes (EBT) Income tax expense (35%) 125,000 43,750 81,250 Earnings after taxes (EAT) The Sterling Tire Company's income statement for 20XX is as follows: STERLING TIRE COMPANY Income Statement Year ended December 31, 20XX Sales (50,000 tires at $65 each) Less: Variable costs (50,000 tires at $40) $ 3,250,000 2,000,000 Contribution margin Less: Fixed costs 1,250,000 1,050,000 Earnings before interest and taxes (EBIT) Interest expense 200,000 75,000 Earnings before taxes (EBT) Income tax expense (35%) 125,000 43,750 81,250 Earnings after taxes (EAT)