Assume that a firm currently has EBIT of $2,000,000, a degree of total leverage of 6.000, and a degree of financial leverage of 1.875. If sales decline by 20% next year, then what will be the firm's expected EBIT in one year? Donotroundintermediatecalculations.
A. $619,200
B. $720,000
C. $871,200
D. $763,200
E. $813,600
Answer: B
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