Author Question: If sales are expected to increase 25%, EBIT is expected to increase 15%, and EPS is expected to ... (Read 90 times)

BrownTown3 · **on:** Apr 25, 2021

Question 1

If EBIT increases 15%, EPS increases by 30%, debt increases by 45%, and the tax rate declines by 5%, what is the degree of financial leverage?
◦ 2
◦ 1
◦ 9
◦ 3
◦ 6

Question 2

If sales are expected to increase 25%, EBIT is expected to increase 15%, and EPS is expected to increase 10%, what is the degree of operating leverage?
◦ 2.5
◦ 6.0
◦ 1.5
◦ 0.6
◦ 1.7

cloud · **Reply #1 on:** Apr 25, 2021

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