Coats Corp

question 1

Multiple Choice

Coats Corp.generates $10,000,000 in sales.Its variable costs equal 85.00% of sales and its fixed costs are $500,000.Therefore,the company's operating income (EBIT) equals $1,000,000.The company estimates that if its sales were to increase 9.50%,its net income and EPS would increase 17.50%.What is the company's interest expense? Do not round intermediate calculations.

• A) $222,857
• B) $148,571
• C) $185,714
• D) $224,714
• E) $143,000