Given the following information, which of the following statements is most FALSE? Historical Yr Projected Yr Sales 185,000 220,000 EBIT 116,000 NI 60,000 140,000 75,190 O a. The degree of total leverage is 1.4153. O b. The degree of operating leverage is 1.0936. The degree of financial la 5004

Given the following information, which of the following statements is most FALSE? Historical Yr Projected Yr Sales 185,000 220,000 EBIT 116,000 NI 60,000 140,000 75,190 O a. The degree of total leverage is 1.4153. O b. The degree of operating leverage is 1.0936. The degree of financial la 5004

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 8P

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Question

Given the following information, which of the following statements is most FALSE?
Historical Yr Projected Yr
Sales
185,000
220,000
EBIT 116,000
140,000
NI
60,000
75,190
O a. The degree of total leverage is 1.4153.
Ob. The degree of operating leverage is 1.0936.
O c. The degree of financial leverage is 1.2236.
d. EPS would increase by the same percentage as NI.
Oe. The financial leverage was caused by the interest expense not staying proportional to Sales.

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