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QUESTION 1
0% debt ratio
Probability
0.20 0.6 0.20
Sales 200 000 300 000 400 000
Less: Variable costs (30%) 60 000 90 000 120 000
Less: Fixed costs 100 000 100 000 100 000
EBIT 40 000 110 000 180 000
Less Interest 0 0 0
Earnings before taxes 40 000 110 000 180 000
Less: Taxes 11 200 30 800 50 400
Earnings after taxes 28 800 79 200 129 600
EPS (25 000 shares) R1.15 R3.19 R5.18