Dittmar Corp

question 124

Multiple Choice

Dittmar Corp. is considering an operational change that will increase its DOL from 2.0 to 3.0. It will be funding this change with debt so that its DFL will increase from 1.2 to 1.5. Analysts believe that the overall change could increase sales by as much as 10% if it is successful, but could decrease sales by 6% if it is not successful. What is the range of possible changes in EPS based on this information?

• A)Decrease of 18% to an increase of 30%
• B)Decrease of 9% to an increase of 15%
• C)Decrease of 6% to an increase of 10%
• D)Decrease of 27% to an increase of 45%
• E)Decrease of 24% to an increase of 40%

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Definitions:

Psychoanalysis

A therapeutic approach and theory of psychotherapy developed by Sigmund Freud focusing on unconscious processes and unresolved conflicts.

Desensitization

A psychological process through which an individual's emotional response to a previously inducing stimulus is reduced, often used as a treatment for phobias.

Free Association

A psychoanalytic technique where patients express thoughts and feelings exactly as they occur, with as little censorship as possible, to uncover unconscious processes.

Unconscious Thoughts

Mental processes that occur without conscious awareness, influencing behavior, perceptions, and emotions.