A Firm Is Expected to Generate $1

question 55

Multiple Choice

A firm is expected to generate $1.5 million in operating income and pay $250,000 in interest.Ignoring taxes,this will generate $12.50 earnings per share.What will happen to EPS if operating income increases by 33.3% to $2.0 million?

• A) EPS increases by 25% to $15.63.
• B) EPS increases by 33.3% to $16.67.
• C) EPS increases by 40% to $17.50.
• D) EPS increases by 60% to $20.00.

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Definitions:

Subclavian Line

A type of intravenous line placed into the subclavian vein, often used for long-term medications or dialysis.

Eutectic Mixture

A mixture of two or more substances that melts or solidifies at a single temperature that is lower than the melting points of the individual substances.

Local Anesthetics

Drugs that cause temporary loss of sensation in a specific area of the body without affecting consciousness.

Intramuscular Injection

The injection of a substance directly into a muscle, a common route for vaccines and certain medications.