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Item Base Sales Sales $500,000 Less: Total variable costs 200,000 Revenue before fixed costs $300,000 Less: Total fixed costs 180,000 EBIT $ 120,000 Less: Interest
Item | Base Sales |
Sales | $500,000 |
Less: Total variable costs | 200,000 |
Revenue before fixed costs | $300,000 |
Less: Total fixed costs | 180,000 |
EBIT | $ 120,000 |
Less: Interest expense | $50,000 |
Earnings before taxes (EBT) | $70,000 |
Less: Taxes at 50% | $35,000 |
Net income | $35,000 |
Less: Preferred dividends | 0 |
Earnings available to common shareholders (EAC) | $35,000 |
Number of common shares | 10,500 |
Earnings per share (EPS) | $3.33 |
Given the information above, what would be the EPS if sales increased by a 20% ?
$5.92 | ||
$6.07 | ||
$5.25 | ||
$6.19 |
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