Over the Last Year,sales at Downscale Department Store Increased 10

question 76

Multiple Choice

Over the last year,sales at Downscale Department Store increased 10% and EBIT increased 5%.If the increase in earnings-per-share was 20%,what is the degree of total leverage?

• A) 3
• B) 4
• C) 5
• D) 2
• E) 1

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Definitions:

Technology Spillover

Occurs when technological advances or innovations benefit other sectors or industries, beyond the original intention.

Negative Externality

A cost that affects a party who did not choose to incur that cost, often associated with environmental, health, and social issues.

Government Subsidized

A financial contribution provided by the government to support industries, businesses, or individuals, often aimed at achieving economic or social objectives.

Negative Externalities

Costs suffered by a third party due to an economic transaction that they were not directly involved in, often leading to market failure.