In 20X5 MyEducator had sales of $5,521 (in millions), EBIT of $1,720 (in millions), and net...

70.2K

Verified Solution

Question

Finance

In 20X5 MyEducator had sales of $5,521 (in millions), EBIT of$1,720 (in millions), and net income of $528 (in millions). ItsDOL, DFL, and DCL are 3.21, 3.26 and 10.46, respectively. If thesales decreases to $5,200 (in millions) in 20X6, what is theearnings before interest and taxes of MyEducator in 20X6?
A)$1,399
B)$674
C)$1,394
D)$1,775
E)$2,041

Answer & Explanation Solved by verified expert

3.6 Ratings (490 Votes)

Degree of operating leverage is used to calculate the percentage change in operating income when sales changes by certain percentage Calculation of change in See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In 20X5 MyEducator had sales of $5,521 (in millions), EBIT of$1,720 (in millions), and net income of $528 (in millions). ItsDOL, DFL, and DCL are 3.21, 3.26 and 10.46, respectively. If thesales decreases to $5,200 (in millions) in 20X6, what is theearnings before interest and taxes of MyEducator in 20X6?A)$1,399B)$674C)$1,394D)$1,775E)$2,041