A firm has a degree of financial leverage of 1.20.If earnings before interest and tax increase by 20%,then net income:
A)will not necessarily change.
B)will increase by 20%.
C)will decrease by 24%.
D)will decrease by 20%.
E)None of the answers are correct.

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The Answer of A firm has a degree of financial leverage of 1.20.If earnings before interest and tax increase by 20%,then net income:
A)will not necessarily change.
B)will increase by 20%.
C)will decrease by 24%.
D)will decrease by 20%.
E)None of the answers are correct.

A Firm Has a Degree of Financial Leverage of 1