Kulwicki Corporation Wants to Determine the Effect of an Expansion

question 13

Multiple Choice

Kulwicki Corporation wants to determine the effect of an expansion of its sales on its operating income (EBIT) .The firm's current degree of operating leverage is 4.50.It projects new unit sales to be 170,000,an increase of 45,000 over last year's level of 125,000 units.Last year's EBIT was $60,000.Based on a degree of operating leverage of 4.50,what is this year's expected EBIT with the increase in sales?

• A) $157,200
• B) $138,336
• C) $196,500
• D) $193,356
• E) $147,768

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Definitions:

Dizygotic

Pertaining to or derived from two separate fertilized ova, leading to fraternal twins.

Monozygotic

Pertaining to twin siblings who originate from a single fertilized egg, resulting in individuals with identical genetic material.

Twins

Siblings born simultaneously from the same pregnancy, which can be identical (monozygotic) or fraternal (dizygotic).

Zygote

An ovum that has been fertilized by a sperm and thus contains a full complement of 46 chromosomes, half from the mother and half from the father.