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

question 20

Multiple Choice

The "degree of leverage" concept is designed to show how changes in sales will affect EBIT and EPS.If a 30.00% 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? Do not round intermediate calculations.

• A) 1.2500
• B) 1.5667
• C) 2.0333
• D) 1.6667
• E) 1.3000

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Definitions:

Gymnosperm Phyla

A group of seed-producing plants that includes conifers and cycads, characterized by seeds that are not enclosed within an ovary.

Morphology

The examination of the shape and architecture of living entities and their unique anatomical characteristics.

Ovary Wall

The outer layer of an ovary in plants or animals, often involved in protecting and nurturing developing reproductive cells.

Maidenhair Tree

Another name for Ginkgo biloba, a unique species of tree known for its fan-shaped leaves and resilience, often considered a living fossil.