Pinches salt company has the following income statement for, Ask an Expert

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Pinches Salt Company has the following income statement for 2010:

Sales	$5,000,000
Variable operating costs	1,000,000
Fixed operating costs	2,000,000
EBIT	$2,000,000
Interest	500,000
EBT	$1,500,000
Tax (at 40%)	600,000
EAT	$900,000
Preferred dividends	100,000
Earnings available to common stockholders	$800,000
Shares outstanding	400,000

a. Compute Pinches's DOL, DFL, and DCL.

b. If sales increase to $5,500,000, what is your forecast of EPS?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91600258

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