A 20% Increase in Sales Causes EPS to Rise from $4.00

question 93

Multiple Choice

A 20% increase in sales causes EPS to rise from $4.00 to $6.50.Assuming the firm has no debt,what is its degree of operating leverage (DOL) ?

• A) 1.00
• B) 1.50
• C) 1.57
• D) 3.13
• E) 2.25

---

Definitions:

Lactation

The biological process by which mammals produce milk to feed their offspring, involving hormonal regulation and mammary gland development.

Gas Neurotransmitters

Small, gaseous molecules that serve as neurotransmitters in the nervous system, capable of diffusing across cellular membranes to send neural signals.

Nitric Oxide

Nitric oxide is a reactive gas and a signaling molecule in many physiological and pathological processes, playing a pivotal role in vascular regulation, neurotransmission, and immune responses.

Blood Vessels

Tubular structures carrying blood throughout the body, including arteries, veins, and capillaries.