The correct answer is: A. Intercept at Y-axis
The financial break-even level of EBIT is the level of EBIT at which a company’s operating income is equal to its interest expense. This is the point at which the company is neither making nor losing money. The financial break-even level of EBIT can be calculated by using the following formula:
Financial break-even EBIT = Interest expense / (1 – Tax rate)
The intercept at the Y-axis on an EBIT-EPS graph is the level of EBIT at which EPS is zero. This is the financial break-even level of EBIT.
The intercept at the X-axis on an EBIT-EPS graph is the level of EPS at which EBIT is zero. This is not the financial break-even level of EBIT.
The slope of an EBIT-EPS graph is the change in EPS divided by the change in EBIT. This is not the financial break-even level of EBIT.