A 20% Increase in Sales Causes EPS to Rise from $4.00

question 93

Multiple Choice

A 20% increase in sales causes EPS to rise from $4.00 to $6.50.Assuming the firm has no debt,what is its degree of operating leverage (DOL) ?

• A) 1.00
• B) 1.50
• C) 1.57
• D) 3.13
• E) 2.25

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