Kulwicki Corporation Wants to Determine the Effect of an Expansion

question 113

Multiple Choice

Kulwicki Corporation wants to determine the effect of an expansion of its sales on its operating income (EBIT) .The firm's current DOL is 2.5.It projects new unit sales to be 170,000,an increase of 45,000 over last year's level of 125,000 units.Last year's EBIT was $60,000.Based on a DOL of 2.5,what is this year's projected EBIT with the increase in sales?

• A) $60,000
• B) $175,000
• C) $100,000
• D) $90,000
• E) $114,000

Recognize different ways a company can manage foreign exchange risk.

Understand the concept of political risk and how it impacts international business.

Distinguish between direct and indirect foreign exchange quotes.

Realize the relationship between the strength of a currency and its impact on international trade and investment.

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Definitions:

Fraudulent Misrepresentation

A false statement made knowingly to deceive another party, leading them to enter into a contract or agreement.

Assertion

An assertion is a confident and forceful statement of fact or belief.

Fraudulent Misrepresentation

A false statement made knowingly or recklessly to induce another party to enter into a contract, resulting in harm or loss.

Reliance

The act of depending on or trusting something or someone.