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The Following Data Have Been Computed for a Firm: When

Question 2

Multiple Choice

The following data have been computed for a firm: when sales are $20,000, EBIT is $5,000 and operating leverage is 2.5. Suppose sales increase to $23,000; what is the new level of EBIT?


A) $1,875
B) $6,875
C) $3,000
D) $8,435

Correct Answer:

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