Lincoln Lodging Inc

question 15

Multiple Choice

Lincoln Lodging Inc.estimates that if its sales increase 10% then its net income will increase 18%.The company's EBIT equals $2.4 million,and its interest expense is $400,000.The company's operating costs include fixed and variable costs.What is the level of the company's fixed operating costs?

• A)$1,083,000
• B)$1,140,000
• C)$1,200,000
• D)$1,260,000
• E)$1,323,000

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Definitions:

Capsules

Small, typically cylindrical, dosage forms designed to encapsulate medicines for oral administration, aiding in ease of consumption and absorption.

Cylinder-Shaped

Describes an object or structure with a circular base and parallel sides, extending equally in height.

Gelatin-Coated

Describes items that have a layer of gelatin applied to them, often used for ease of swallowing pills and capsules.