Gentech, Inc A)139
B)1

question 30

Multiple Choice

Gentech, Inc. is an integrated circuit (microchip) manufacturer based out of New Jersey. Its principal products include microprocessors and motherboard chipsets. Selected financial statement values for Gentech are shown in the table, below. What is the degree of total leverage for Gentech given the change in revenues from Year 1 to Year 2? $$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Gentech Inc. } \\( \$ 000 \text { s } ) \end{array} & & \\\hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { Sales } & \$ 70,000 & \$ 75,000 \\\hline \text { EBIT } & 9,000 & 9,800 \\\hline \text { EPS } & 0.4172 & 0.4586 \\\hline\end{array}$$

• A)1.39
• B)1.24
• C)1.11
• D)0.54
• E)0.96

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Definitions:

Appendicular Skeleton

The portion of the skeleton consisting of the upper limbs and the lower limbs and their girdles.

Synovial Joints

Highly movable joints surrounded by a fluid-filled capsule, allowing for smooth movement between bones.

Cartilaginous

Relating to a type of flexible connective tissue found in various parts of the body, such as joints and respiratory structures.

Fibrous

Composed of or characterized by the presence of fibers.