Sinclair and Bosewell Brothers Inc are both involved in the production of bric

    Sinclair and Bosewell Brothers Inc are both involved in the production of brick. Financial information is as follows

    Debt @ 12% for Sinclair is 1680000 and Bosewell is 0

    Common Stock $10 per share Sinclair is 1120000 and Bosewell is 2800000

    Total for both are 2800000

    Common share for SInclair are 112000 and Bosewell 280000

    Operating Plan

    Sales (68000 units @ $25 each) Sinclair 1700000 Bosewell 1700000

    Less:Variable Cost Sinclair 1224000(18per unit) Bosewell 816000(12 per unit)

    Fixed Cost Sinclair 0 Bosewell 318000

    EBIT Sinclair 476000 Bosewell 566000

    a= If you compare Sinclairs capital structure with Bosewells Operating Plan what is the degree of combined leverage?

    b=If you combined Bosewells capital structure with Sinclairs Operating Plan what is the degree of combined leverage?

    c= In part b if the sales double by what percentage will EPS increase?

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