Which of the following statements concerning the degree of total leverage (DTL) is correct?
A)DTL is the percentage change in earnings per share (EPS) that results from a given percentage change in earnings before interest and taxes (EBIT).
B)It is the level of earnings before interest and taxes (EBIT) at which earnings per share (EPS) equals zero.
C)DTL is the percentage change in net operating income (NOI) (earnings before interest and taxes) associated with a given percentage change in sales.
D)DTL represents the level of production and sales at which net operating income is zero.
E)DTL is the percentage change in earnings per share (EPS) that results from a 1 percent change in sales.

Question

Quizplus · Accepted Answer

DTL measures the sensitivity of EPS to changes in sales, indicating the percentage change in EPS resulting from a 1% change in sales.

Which of the Following Statements Concerning the Degree of Total