Assume that a firm has a degree of financial leverage of 1.65. If sales increase by 20%, the firm will experience a 60% increase in EPS, and it will have an EBIT of $100,000. What will be the EBIT for this firm if sales do not increase? Donotroundintermediatecalculations.
A. $86,533
B. $71,867
C. $73,333
D. $90,200
E. $89,467
Answer: C
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