A Degree of Operating Leverage (DOL) Equal to 1

Multiple Choice

A degree of operating leverage (DOL) equal to 1.5 times indicates that for every 1 percent change in _____. 

A) earnings per share (EPS) there will be a 1.5 percent change in sales
B) interest there will be a 1.5 percent change in earnings before interest and taxes (EBIT)
C) sales there will be a 1.5 percent change in earnings before interest and taxes (EBIT)
D) earnings before interest and taxes (EBIT) there will be a 1.5 percent change in earnings per share (EPS)
E) sales there will be a 1.5 percent change in earnings per share (EPS)