Figure 4-6

question 72

Multiple Choice

Figure 4-6. Shorter Company had originally expected to earn operating income of $130,000 in the coming year.Shorter's degree of operating leverage is 2.4.Recently,Shorter revised its plans and now expects to increase sales by 20% next year.
Refer to Figure 4-6.What is Shorter's revised expected operating income for the coming year?

• A)$192,400
• B)$156,000
• C)$312,000
• D)$130,000
• E)$62,400

Evaluate the financial implications of share repurchase programs versus dividend payments.

Calculate the effect of dividend declaration and payment dates on investor dividend income.

Understand the impact of earnings and retention ratio on dividend payments and shareholder wealth.

Analyze the financial health of a company through its capital structure, including debt-equity ratios and its impact on dividend policies and capital spending.

---

Definitions:

Scientific Discoveries

are findings or breakthroughs that significantly advance knowledge, often leading to new technologies, methods, or understandings in various fields.

Industrial Policy

Government strategies aimed at improving the competitive position and capabilities of domestic industries and firms.

Taxes, Subsidies, and Regulations

These are tools used by governments to influence economic activity. Taxes are levies on income or purchases, subsidies provide financial support, and regulations set rules for how businesses can operate.

Specific Industries

Specific Industries are distinct sectors of the economy that produce or handle similar types of goods and services, such as the automotive or technology industries.