If EBIT Equals $140,000 and Interest Equals $21,000, with a Tax

question 81

Multiple Choice

If EBIT equals $140,000 and interest equals $21,000, with a tax rate of 31%, what is the degree of financial leverage?

• A) 6.67x
• B) 5.67
• C) 3.91x
• D) 1.18x

---

Definitions:

Newborn

A newborn refers to an infant in the first few hours to weeks of life, typically up to 28 days old.

Fetal Alcohol Syndrome

A condition in a child that results from alcohol exposure during the mother's pregnancy, causing brain damage and growth problems.

Offspring

The children or young born to a person, animal, or plant.

Maturation

Biological growth processes that enable orderly changes in behavior, relatively uninfluenced by experience.