A Firm Expects to Have a 15 Percent Increase in Sales

question 37

Multiple Choice

A firm expects to have a 15 percent increase in sales this year. If its degree of operating leverage is 1.2 and its degree of financial leverage is 3.5, what will be the percentage change in earnings per share (EPS) this year?

• A)4.2%
• B)48.05%
• C)63.0%
• D)52.5%
• E)18.0%

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Definitions:

Resistance Training

A form of physical activity focused on increasing muscle strength and mass through exercises involving weights or resistance bands.

Fat Distribution

The way in which fat is spread throughout the body, affecting an individual's shape and risk factors for certain diseases. It can be predominantly in the abdominal area (visceral) or around the hips and thighs (subcutaneous).

Premenopausal Women

Women who are in the phase of life before the cessation of menstrual periods, marked by natural estrogen and progesterone fluctuations.

Subcutaneous Fat

A layer of fat stored directly under the skin, serving as energy storage and insulation for the body.