module is Kootenay Logging Corporation had the following results for their year ended September 30, 2020, Kootenay Logging Corporation Income Statement For the year ended Sept 30, 2020 Sales Variable Expenses Contribution margin Fixed Expenses EBIT 750,000 500,000 250,000 150,000 100,000 25,000 75,000 20,000 Interest EBIT taxes Net Income Shares Outstanding 55,000 150,000 1 x A BIT 2 Calculate the firms Earnings Per Share (1 mark) b) Calculate the firms Profit Margin (1 mark) EE 1 x A B 1 TB Calculate the firms Degree of Operating Leverage (2 marks) d) Calculate the firms Degree of Financial Leverage (2 marks) e) Calculate the firms Degree of Combined Leverage (2 marks) 10 What effect will an increase in sales of 15% have on Net Income? (2 marks) le) Calculate the firms Degree of Combined Leverage (2 marks) What effect will an increase in sales of 15% have on Net Income? (2 marks) 9 The company is interested in expanding in 2021. The expansion will cost $550,000 and will increase Revenue by $100,000. Cost of Goods Sold will remain at the same percentage of sales and fixed costs will increase by $30,000. They can either fund the expansion by issuing 25,000 in shares and $50,000 in bonds at 5% interest or issuing $400,000 bonds at 5% interest and 3,000 in shares. Calcualte the EBIT/EPS indifference point between these two options. (5 marks) 7