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Commerce · Q1256

Financial Management

Graduate and Post Graduate · Commerce · question 1256

Q1256

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%
Answer
D.
None of the above

Answer: Option C

Solution

Answer: Option C
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