If EBIT Equals $140,000 and Interest Equals $21,000,with a Tax

question 83

Multiple Choice

If EBIT equals $140,000 and interest equals $21,000,with a tax rate of 31%,what is the degree of financial leverage?

• A) 6.67x
• B) 5.67x
• C) 3.91x
• D) 1.18x

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Definitions:

Saloon

A type of bar popular in the United States during the 19th and early 20th centuries known for serving alcoholic beverages.

Union Hall

A building or facility used by a labor union for meetings, administration, and as a gathering place for members.

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Males who have moved from their country of origin to another country with the intention of residing there permanently or for an extended period.

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An industrial sector historically significant to both the state of Pennsylvania and the United States, known for its substantial contribution to the country's steel production and economic development.