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Homework answers / question archive / Consider the following information: Sales: $950,000 Interest expense: 40,000 Variable costs: 270,000 Taxes: 84,000 Fixed costs: 400,000 If sales increase by 5%, what should be the increase in earnings per share? O 14
Consider the following information: Sales: $950,000 Interest expense: 40,000 Variable costs: 270,000 Taxes: 84,000 Fixed costs: 400,000 If sales increase by 5%, what should be the increase in earnings per share? O 14.17% O 12.14% O 5.83% O 5.0% 8.17%
rate positively .
| Old | Revised | ||
| Sales | 950000 | 997500 | |
| Variable cost | 270000 | 283500 | |
| Fixed cost | 400000 | 400000 | |
| Interest expenses | 40000 | 40000 | |
| Profit before tax | 240000 | 274000 | |
| Taxes @ 35% | 84000 | 95900 | |
| net income | 156000 | 178100 | |
| Increase in EPS = | 14.17% | ||
| 178100/156000-1 | |||
| ans= | 14.17% |
