If Sales Are Expected to Increase 25%,EBIT Is Expected to Increase

question 18

Multiple Choice

If sales are expected to increase 25%,EBIT is expected to increase 15%,and EPS is expected to increase 10%,what is the degree of operating leverage?

• A) 2.5
• B) 6.0
• C) 1.5
• D) 0.6
• E) 1.7

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Definitions:

Ideal Size

The optimal size or magnitude of something, such as a group or organization, that facilitates its best performance or function.

Objectives

are specific, measurable goals that an individual or organization aims to achieve within a set timeframe.

Attributes

Qualities, features, or characteristics that are inherent in or ascribed to someone or something.

Closed Membership

A policy or situation where membership in a group or organization is restricted and not freely open to all.