Which of the Following Statements Concerning the Degree of Total

question 10

Multiple Choice

Which of the following statements concerning the degree of total leverage (DTL) is correct?

• A)DTL is the percentage change in earnings per share (EPS) that results from a given percentage change in earnings before interest and taxes (EBIT).
• B)It is the level of earnings before interest and taxes (EBIT) at which earnings per share (EPS) equals zero.
• C)DTL is the percentage change in net operating income (NOI) (earnings before interest and taxes) associated with a given percentage change in sales.
• D)DTL represents the level of production and sales at which net operating income is zero.
• E)DTL is the percentage change in earnings per share (EPS) that results from a 1 percent change in sales.

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Definitions:

Multinational Corporations

Large companies that operate and have assets in several countries, allowing them to produce and sell goods and services across national borders.

Trade Adjustment Assistance

A federal program designed to help workers who have lost their jobs as a result of international trade find new employment.

Imports

Goods or services brought into a country from abroad for sale.

European Union

A political and economic union of 27 European countries that have agreed to abide by common policies on a range of issues, including trade, security, and laws.