QUESTION 2 (25 MARKS) a. Mas Merah Berhad reported that its sales and earnings before interest and taxes(EBIT) increased by 10%, but its earnings per share(EPS) increased by 30%. Explain why the result of the larger change in earnings per share. (2 marks) b. X90 Bhd reported the following income statement for 2018: Sales RM2,500,000 Variable Costs 900,000 Fixed Operating Costs 700,000 earnings before interest and taxes 900,000 Interest Expense 200,000 700,000 Taxes (30%) 210,000 Net Income RM490,000 Earnings Per Share RM4.90 If X90's sales next year increase by 20%, determine the value of the: i. earnings per share (3 marks) ii. earnings before interest and taxes (3 marks) c. Steel X Corp has very high operating leverage due to the capital intensive nature of the steel business. The firm's CEO is concerned about the variability in the firm's EPS if sales should drop, and decides to take action. Advise the CEO on the variability in the firm's EPS for a given change in sales