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NEW QUESTION: 1
Assume that a firm has a degree of financial leverage of 1.25. If sales increase by 20 percent, the firm will experience a 60 percent increase in EPS, and it will have an EBIT of $100,000. What will be the EBIT for this firm if sales do not increase?
A. $84,375
B. $113,412
C. $42,115
D. $100,000
E. $67,568
Answer: E
Explanation:
Explanation/Reference:
Explanation:
DTL = % change EPS/% change Sales = 60%/20% = 3.0.
DOL = DTL/DFL = 3.0/1.25 = 2.40.
Old EBIT = $100,000/[1 + (0.20)(2.40)] = $100,000/1.48 = $67,568.
Alternate solution:
Use DFL expression to calculate change in EBIT and previous EBIT:
DFL = 1.25 = %change EPS/%change EBIT
= 0.60/[change EBIT/($100,000 - change EBIT)]
= [0.60($100,000) - 0.60(change EBIT)]/change EBIT
1.25 change EBIT = $60,000 - 0.60(change EBIT)
1.85 change EBIT = $60,000
change EBIT = $32,432.
Old EBIT = $100,000 - $32,432 = $67,568.

NEW QUESTION: 2
Your customer wants its users to be able to view an intranet website from the
SuccessFactors Learning system.
What do you use to accommodate this requirement?
Please choose the correct answer.
Response:
A. Easy links
B. Quick link configuration
C. Direct link tool
D. Module tab configuration
Answer: A

NEW QUESTION: 3

What was the approximate frog population in the lake when the study began?
A. 16,000
B. 12,750
C. 13,500
D. 12.75
E. 13.5
Answer: C

NEW QUESTION: 4

A. Modeling
B. Data Preparation
C. Evaluation
D. Business Understanding
Answer: B