If EBIT Equals $280,000 and Interest Equals $20,000, with a Tax

question 55

Multiple Choice

If EBIT equals $280,000 and interest equals $20,000, with a tax rate of 31%, what is the degree of financial leverage?

• A) 14.0x
• B) 9.66x
• C) 3.91x
• D) 2.33x

---

Definitions:

Heart Disease

A range of conditions affecting the heart, including coronary artery disease, heart arrhythmias, and congenital heart defects.

Medication

Substances used for medical treatment, especially for relieving or treating illness or disease.

Exercise

Physical activities intended to improve strength, fitness, and overall health.

Biopsychosocial Model

A broad view that attributes disease outcome to the complex, variable interaction of biological factors, psychological factors, and social factors.