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3. A review of the degree of financial leverage (DFL) It is December 31. Last year, Campbell Construction had sales of $120,000,000, and it forecasts that next year's sales will be $108,000,000, Its fixec costs have been-and are expected to continue to be $48,000,000, and its variable cost ratio is 21.00%. Campbell's capital structure consists of a $15 million bank loan, on which it pays an interest rate of 8%, and 750,000 shares of common equity. The company's profits are taxed at a marginal rate of 40% The following are the two principal equations that can be used to calculate a firm's DFL value: Given this infromation, complete the following sentences: Siven this infromation, complete the following sentences: - The compony's percentage change in EBIT is - The percentage change in Campbell's earnings per share (EPS) is - The degree of financial leverage (DFL) at $100,000,000 is (Hint: Use the changes in EPS and Esrr that you computed to determine DFL.) Consider the foliowing statement about DFL, and indicate whether or not it is correct. Assume that a firm's fixed capital costs remain constant across a range of operating profit (EAIT) values. The firm's DFL will vary across the range of EBIT velues. - The company's percentage change in EBIT is - The percentage change in Campbell's earnings per share (EPS) is - The degree of financial leverage (DFL) at $108,000,000 is (Hint: Use the changes in EPS and EBIT that you computed to determine DF Consider the following statement about DFL, and indicate whether or not it is correct. Assume that a firm's fixed capital costs remain constant across a range of operating profit (EBIT) values. The firm's DFL will vary across the range of EBIT values. False True degree of financial leverage (DFL) Last year, Campbell Construction had sales of $120,000,000, and it forecasts that ne and are expected to continue to be $48,000,000, and its variable cost ratio is 21.00% on, on which it pays an interest rate of 8%, and 750,000 shares of common equity. he that a firm's fixed capital costs remain constant across a range of operating nge of EBIT values. sentences: ngs per share (EPS) is 108,000,000 is the changes in EPS and EBI and indicate whether o rrect. remain constant across a range of operating profit (EBIT) values. 16 Financial Planning and Control n, complete the following sentences: rcentage change in EBIT is hange in Campbell's earnings per share (EPS) is ancial leverage (DFL) at $108,000,000 is (Hint: Use the changes in EPS EIT values