Looking for the answer to the question below related to Financial Management?
If a firm has a DOL of 2.8, it means:
|A. If sales increase by 2.8%, the EBIT will increase by 1%
B. If EBIT increase by 2.896, the EPS will increase by 1 %
C. If sales rise by 1%, EBIT will rise by 2.8%
D. None of the above
The Correct Answer Is:
- C. If sales rise by 1%, EBIT will rise by 2.8%
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