If a Firm Sees Its EPS Increase 27% on a 12

question 46

Multiple Choice

If a firm sees its EPS increase 27% on a 12% increase in sales. During the same period the firm saw its EBIT increase only 8%. What is the firm's DOL?

• A) 1.50
• B) 3.38
• C) 1.34
• D) 0.67

---

Definitions:

Differential Carrier

The housing that contains the differential assembly in a vehicle, responsible for allowing wheels to rotate at different speeds for smooth turns.

Gear Reduction

A mechanism that reduces the speed of an input shaft to a slower output speed, increasing torque in the process.

Steering Axles

Axles equipped with mechanisms for steering, allowing the vehicle to change direction; critical for maneuverability.

Highway Truck

A type of truck engineered for long-distance travel on highways, typically designed for transporting cargo efficiently.