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Question

If the degree of operating leverage of a firm is given as 2.8 times, it means:

A If there is 2.8% increase in sales, the EBIT will increase by 1%

B If there is 2.8% increase in sales, EPS will increase by 1%

C If there is 1% increase in sales, the EBIT will increase by 2.8%

D If there is 1% increase in sales, EPS will increase by 2.8%

E If there is 1% increase in EBIT, EPS will increase by 2.8%

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