Problem 2 (18 marks) You have been provided the following income statements for Tiger Industries and SMU DAWG Incorporated. Tiger SMU DAWG Industries Industries 20 Income Statement (5000) Sales B780 11268 Cost of Goods Sold 9,0 D 5,406 Fixed costs 3250 1950 Depreciation 2,450 1470 Eamings Before Interest and Taxes 4,070 2,442 Interest 3,065 189 Income Before Taxes 1005 603 Income Taxes 402 211 Net Income 603 392 Shares d's po 65 a. Calculate the degree of operating leverage for each firm. Show your work (4 marks) b. Calculate the degree of financial leverage for each firm. (4 marks) c. Calculate the degree of combined leverage for each firm. (4 marks) d. If both firms were to experience a 15% increase in sales, what is the percentage change impact in the EPS and what is the new EPS for each firm. (4 marks) e. Which firm is more risky? (2 marks)