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Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of brick for the...

Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of brick for the homebuilding industry. Their financial information is as follows: Sinclair BoswellCapital Structure   Debt @ 10%$2,100,000  0Common stock, $10 per share 1,400,000 $3,500,000Total$3,500,000 $3,500,000Common shares 140,000  350,000      Operating Plan:     Sales (75,000 units at $15 each)$1,125,000 $1,125,000Variable costs 900,000  450,000Fixed costs 0  325,000Earnings before interest and taxes (EBIT)$225,000 $350,000 The variable costs for Sinclair are $12 per unit compared to $6 per unit for Boswell. a. If you combine Sinclair’s capital structure with Boswell’s operating plan, what is the degree of combined leverage? (Round your answer to 2 decimal places.)    b. If you combine Boswell’s capital structure with Sinclair’s operating plan, what is the degree of combined leverage? (Round your answer to the nearest whole number.)    c. In part b, if sales double, by what percentage will earnings per share (EPS) increase? (Round your answer to the nearest whole percent.)   

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago
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