The "Degree of Leverage" Concept Is Designed to Show How

question 7

Multiple Choice

The "degree of leverage" concept is designed to show how changes in sales will affect EBIT and EPS.If a 10% increase in sales causes EPS to increase from $1.00 to $1.50,and if the firm uses no debt,then what is its degree of operating leverage?

• A)4.2869
• B)4.5125
• C)4.7500
• D)5.0000
• E)5.2500

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Definitions:

Ornithophobia

An abnormal and irrational fear of birds, often resulting in avoidance behavior and distress in the presence of birds.

Behavioral Treatment

A range of therapeutic interventions aimed at modifying maladaptive behaviors through learning principles, such as reinforcement, to improve mental health and functionality.

Caged Birds

Birds that are kept in captivity inside cages, often as pets, which may impact their behavior and physical health.

Modeling

Process of learning behaviors by imitating others, especially authority figures or people like oneself.