The EBIT-EPS Indifference Point

question 153

Multiple Choice

The EBIT-EPS indifference point

• A) identifies the EBIT level at which the EPS will be the same regardless of the financing plan.
• B) identifies the point at which the analysis can use EBIT and EPS interchangeably.
• C) identifies the level of earnings at which the management is indifferent about the payments of dividends.
• D) identifies the sales level at which EBIT equals EPS.

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Definitions:

nAch

A term used in psychology to denote the need for achievement; it's a person's motivation to excel and achieve in tasks.

Internal Locus of Control

Internal Locus of Control is a psychological concept referring to individuals who believe they can control their life, attributing success to their own efforts and abilities rather than external factors.

Decremental

Characterized by a gradual decrease in size, strength, or value over time.

Incidental

Occurring alongside or as a minor accompaniment to something else, not central or primary.