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

question 4

Multiple Choice

The "degree of leverage" concept is designed to show how changes in sales will affect EBIT and EPS.If a 20.00% 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) 2.1250
• B) 2.8500
• C) 2.4750
• D) 2.5000
• E) 2.0000

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Definitions:

Tissues

Groups of similar cells in organisms that work together to perform specific functions.

Respiratory System

The organ system that facilitates breathing, including the lungs, airways, and muscles, enabling the exchange of oxygen and carbon dioxide.

Tuberculosis

A contagious bacterial infection caused by Mycobacterium tuberculosis, primarily affecting the lungs but can spread to other organs.

COPD

Chronic Obstructive Pulmonary Disease, a lung condition characterized by persistent respiratory symptoms and airflow limitation.