Assume That a Firm Currently Has EBIT of $2,000,000,a Degree

question 11

Multiple Choice

Assume that a firm currently has EBIT of $2,000,000,a degree of total leverage of 7.500,and a degree of financial leverage of 1.875.If sales decline by 20% next year,then what will be the firm's expected EBIT in one year? Do not round intermediate calculations.

• A) $464,000
• B) $400,000
• C) $488,000
• D) $372,000
• E) $324,000

---

Definitions:

United States

A country located in North America, known for its large economy and diverse population.

Price

The payment sum forecasted, compelled, or allocated for a specific transaction.

Import

The act of bringing goods or services into a country from abroad for the purpose of trade or sale.

CD-Rom Drives

Devices used to read data stored on CD-ROMs, which were widely utilized for software, media, and data storage in the late 20th and early 21st centuries.