This is the most recent fiscal year income statement for Wilmocoy, Inc.

Willmcoy, Inc Income Statement

Sales .......................................$.1800,000 Less: Variable cost( 30% of sale)....$450,000 Fixed cost........................550,000 Earnings before interest and taxes....800,000 Less: interest expense...................200,000 Earnings before taxes...................600,000 Less: Taxes@30%............................180,000 Earnings after taxes.....................$ 420,000 Shares.......................................150,000 earnings per share......................$2.80

Wilmcoy is planning a $400,000 expansion that is expected to produce a 25% increase in sales next year. Variable costs will remain at 30% of sales, and fixed costs will go up to 1,000,000. The expansion will be financed entirely using debt for which they have to pay 15% annual interest. Recalculate Earnings After Taxes and Earnings per Share. Is this expansion going to be good for Wilmcoy. Inc?