Bristal Boats, Inc. reports sales of $5,000,000, variable costs of $500,000, fixed operating costs of $1,250,000, and interest expense of $350,000. The corporation's EBIT is $3,250,000 and its marginal tax rate is 30%. If the corporation is able to increase its sales by 25%, then
A. its EBIT and EPS will both increase, but less than 25% due to fixed costs and taxes.
B. its EBIT will increase by more than 25% and its EPS will increase by more than the percentage increase in EBIT.
C. its EBIT will increase by more than 25% and its EPS will increase by less than 25%.
D. its EBIT will increase by 25% and its EPS will increase by 25%.