Integrative-Optimal capital structure Country Textiles, which has fixed operating costs of $292,000 and variable operating costs equal to 40% of sales, has made the following three sales estimates, with their probabilities noted. Sales $604,000 890,000 1,206,000 Probability 0.30 0.40 0.30 The firm wishes to analyze five possible capital structures0%, 15%, 30%, 45%, and 60% debt ratios. The firm's total assets of $1.07 million are assumed to be constant. Its common stock has a book value of $25 per share, and the firm is in the 40% tax bracket. The following additional data have been gathered for use in analyzing the five capital structures under consideration. Capital structure debt ratio Before-tax cost of debt, id 0.0% 8.1 9.8 13.1 16.9 Required return, rs 9.9% 10.4 11.5 13.9 19.9 a. Calculate the level of EBIT associated with each of the three levels of sales. Calculate the EBIT associated with each of the three levels of sales below: (Round to the nearest dollar.) 0.30 Probability Sales Less: Variable costs (40%) Less: Fixed costs EBIT Integrative-Optimal capital structure Country Textiles, which has fixed operating costs of $292,000 and variable operating costs equal to 40% of sales, has made the following three sales estimates, with their probabilities noted. Sales $604,000 890,000 1,206,000 Probability 0.30 0.40 0.30 The firm wishes to analyze five possible capital structures0%, 15%, 30%, 45%, and 60% debt ratios. The firm's total assets of $1.07 million are assumed to be constant. Its common stock has a book value of $25 per share, and the firm is in the 40% tax bracket. The following additional data have been gathered for use in analyzing the five capital structures under consideration. Capital structure debt ratio Before-tax cost of debt, id 0.0% 8.1 9.8 13.1 16.9 Required return, rs 9.9% 10.4 11.5 13.9 19.9 a. Calculate the level of EBIT associated with each of the three levels of sales. Calculate the EBIT associated with each of the three levels of sales below: (Round to the nearest dollar.) 0.30 Probability Sales Less: Variable costs (40%) Less: Fixed costs EBIT