Howell Enterprises is forecasting EPS of $4.00 per share for next year.The firm has 10,000 shares outstanding, it pays 12 percent interest on its debt, and it faces a 40 percent marginal tax rate.Its estimated fixed costs are $80,000 while its variable costs are estimated at 40 percent of revenue.The firm's target capital structure is 40 percent equity and 60 percent debt and it has total assets of $400,000.On what level of sales is Howell basing its EPS
Forecast?
A)$1,000,000
B)$480,400
C)$316,722
D)$292,445
E)$105,280

Question

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The Answer of Howell Enterprises is forecasting EPS of $4.00 per share for next year.The firm has 10,000 shares outstanding, it pays 12 percent interest on its debt, and it faces a 40 percent marginal tax rate.Its estimated fixed costs are $80,000 while its variable costs are estimated at 40 percent of revenue.The firm's target capital structure is 40 percent equity and 60 percent debt and it has total assets of $400,000.On what level of sales is Howell basing its EPS
Forecast?
A)$1,000,000
B)$480,400
C)$316,722
D)$292,445
E)$105,280

Howell Enterprises Is Forecasting EPS of $4