Refer to the Scenario Above

question 28

Multiple Choice

Refer to the scenario above. What would be the unleveraged and leveraged EPSs look like if EBIT were $2,400?

• A) All-equity EPS = $4.00, leveraged-equity EPS = $4.50
• B) All-equity EPS = $3.00, leveraged-equity EPS = $4.00
• C) All-equity EPS = $4.00, leveraged-equity EPS = $5.00
• D) All-equity EPS = $3.00, leveraged-equity EPS = $3.50

---

Definitions:

Substantial Performance

A legal concept in contract law where a party has performed enough of their contractual obligation to warrant payment, albeit with minor deviations from the terms.

Nonconforming Goods

Products delivered under a sales contract that do not meet the specifications, quality, or quantity requirements agreed upon by the buyer and seller.

UCC

The Uniform Commercial Code (UCC) is a set of laws that provide legal standards and regulations for commercial transactions and business dealings.

Identified Goods

Goods explicitly designated or specified in a contract of sale, which sets them apart from other goods that may be part of a broader category.