Coats Corp

Multiple Choice

Coats Corp.generates $10,000,000 in sales.Its variable costs equal 85% 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 10%,its net income and EPS would increase 17.5%.What is the company's interest expense?

A) $122,482
B) $128,929
C) $135,714
D) $142,857
E) $150,000