The "degree of leverage" concept is designed to show how changes in sales will affect EBIT and EPS.If a 20.00% 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?
A) 2.1250
B) 2.8500
C) 2.4750
D) 2.5000
E) 2.0000

Question

Quizplus · Accepted Answer

The Answer of The "degree of leverage" concept is designed to show how changes in sales will affect EBIT and EPS.If a 20.00% 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?
A) 2.1250
B) 2.8500
C) 2.4750
D) 2.5000
E) 2.0000

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