Lincoln Lodging Inc

question 6

Multiple Choice

Lincoln Lodging Inc.estimates that if its sales increase 10.00% then its net income will increase 14.50%.The company's EBIT equals $2.4 million,and its interest expense is $400,000.The company's operating costs include fixed and variable costs.What is the level of the company's fixed operating costs? Do not round your intermediate calculations.

• A) $480,000
• B) $455,000
• C) $400,000
• D) $500,000
• E) $420,000

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Definitions:

Capital

Financial assets or the financial value of assets, such as cash and goods, working to produce further wealth or used in the production of goods and services.

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, leading to specialized production and trade.

Production Possibilities

Different mixtures of products and services that an economy can generate with its current resources and technological capabilities.

Fish

Aquatic animals that are primarily gilled and often harvested for food, sport, or aquariums.