A Firm Is Expected to Generate $1

question 94

Multiple Choice

A firm is expected to generate $1.5 million in operating income and pay $250,000 in interest.Ignoring taxes, this will generate $12.50 earnings per share.What will happen to EPS if operating income increases to $2.0 million?(use the values in dollar)

• A)EPS will increase to $15.63.
• B)EPS will increase to $16.67.
• C)EPS will increase to $17.50.
• D)EPS will increase to $20.00.

---

Definitions:

Group Decision Making

The process by which a group of individuals come together to make a decision, typically through discussion and considering multiple perspectives.

Truth-Seeking

Means that a person has intellectual integrity and a courageous desire to actively strive for the best possible knowledge in any given situation. A truth-seeker asks probing questions and follows reasons and evidence wherever they lead, even if the results go against his or her cherished beliefs.

Evaluate an Argument

The process of critically analyzing an argument to determine its validity and soundness.