Suppose that a firm has a degree of financial leverage (DFL) that is greater than 1.0; that is, DFL > 1. If the firm's sales decrease by 1 percent, its ______ will decrease by more than 1 percent.
A. earnings per share (EPS)
B. net operating income (NOI)
C. interest expense
D. variable costs
E. fixed financing costs
Answer: A
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