Bristal Boats, Inc reports sales of $4,000,000, variable costs of $500,000, fixed operating costs of
$1,250,000, and interest expense of $350,000. The corporation's EBIT is $3,250,000 and its marginal
tax rate is 30%.
If the corporation is able to increase its sales by 25%, then
A) its EBIT will increase by more than 25% and its EPS will increase by less than 25%.
B) its EBIT will increase by more than 25% and its EPS will increase by more than the percentage
increase in EBIT.
C) its EBIT will increase by 25% and its EPS will increase by 25%.
D) its EBIT and EPS will both increase, but less than 25% due to fixed costs and taxes.
B
You might also like to view...
The accounting equations is assets + liabilities = owners equity
A. True B. False
Souder's project screening criterion that indicates an effective model must reflect organization objectives, including a firm's strategic goals and mission is called:
A) Realism. B) Capability. C) Comparability. D) Ease of use.