Question
Analysts have evaluated the Sivar Silver Company and discovered that if sales are $800,000, the following measures will exist for the company: Degree of operating
Analysts have evaluated the Sivar Silver Company and discovered that if sales are $800,000, the following measures will exist for the company:
Degree of operating leverage (DOL) = 4.0X
Degree of financial leverage (DFL) = 2.0X
Earnings before interest and taxes (EBIT) = $50,000
Earnings per share (EPS) = $4.00
According to this information, what will Sivars EBIT be if sales actually turned out to be $720,000 rather than $ 800,000? What will the earnings per share be?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Introduction To Finance Markets, Investments, And Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
17th Edition
1119561175, 978-1119561170
