It is December 31. Last yeat, Torres Industries had sales of $80,000,000, and it forecasts that next year's sales will be $76,000,000. tes fixed costs have been-and are expected to continue to be- $40,000,000, and its variable cost ratio is 11.00%. Torres's copital structure consists of a 515 million bank loan, on which it pays an interest rate of 8%, and 750,000 thares of common equity. The company's profits are tared at a marginal rate of 40%. Given this data, complete the following sentences: Note: For these computations, round ebch value to two decimal places. - The company's percentage change in EBit is - The percentage change in Torrer's earnings per share (EPS) is - The degree of financial leverage (DFL) at $76,000,000 is Consider the following statement about OF, and indiate whether or not it is comect. Assume that of a given level of sales, the firm's ofL is 4.50. This means that a 1W decrease in the firms tart will result in a corresponding 4.5% increase in the firm's EBr. False True It is December 31. Last vear, Torres Industries had sales of $80,000,000, and it forecasts that next year's sales will 6e $76,000,000, its fixed costs have been-and are expected to continue to be- $40,000,000, and its variable cost ratio is 11.009 . Torres's capital structure consists of a $15 million bank loan, on which it pays an interest rate of 8%, and 750,000 shares of common equity. The company's profits are taxed at a marginal fate of 40%. Given this dota, complete the following sentences: Note: For these computations, round each value to two decimal places. - The company's percentage change in EBrT is - The percentage change in Torres's earnings - The degree of financial leverage (DF) at si Consider the following statement about OFL. her or not it is correct. Assume that at a given level of sales, the firm's DFL is 4.50. This means that a 1% decrease in the firm's EBIT will result in a corresponding 4.5% increase in the firm's eBrT. False True It is December 31. Last yeac, Torres Industries had sales of 380,000,000, and it forecasts that next year's sales will be $76,000,000. Its fixed costs have been-and are expected to continue to be $40,000,000, and its variable cost ratio is 11.00%. Torres's cepital structure consists of a $15 milion bank loan, on which it pays an interest rate of 8%, and 750,000 shares of common equity. The company's profits are taxed of a marginal fate of 40%. Given this data, complete the following sentences: Note: For these computations, round each value to two decimal places: - The company's percentage change in EBIT is - The percentage change in Torres's earnings per share (EPS) is - The degree of financial leverage (DFL) at $76,000,000 is Consider the following statement about D DF andindicatewhethin icorrect. Assume that at a given level of sales, the firm's DFL is 4.50 . This means that a 1 decrease in the firm's EBIT will result in a corresponding 4.5% increase in the firm's EBIT. False True It is December 31. Last year, Torres Industries had sales of $80,000,000, and it forecasts that next year's sales will be $76,000,000. Its fixed costs have been-and are expected to continue to be $40,000,000, and its variable cost ratio is 11.00%. Torres's capital structure consists of a $15 miliion bank loan, on which it pays an interest rate of 8%, and 750,000 shares of common equity. The company's profits are taxed at a marginal rate of 40%. Given this data, complete the following sentences: Note: For these computations, round each value to two decimal places. - The company's percentage change in EBIT is - The percentage change in Torres's earnings per share (EPS) is - The degree of financial leverage (DFL) at $76,000,000 is corresponding 4.5% increase in the firm's EBIT. False True
