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Moe & Chris' Delicious Burgers, Inc., sells food to University Cafeterias for $15 a box. The fixed costs of this operation are $80,000, while the variable cost per box is $10.
Questions:a. What is the break-even point in boxes?b. Calculate the profit or loss on 15,000 boxes and on 30,000 boxes.c. What is the degree of operating leverage at 20,000 boxes and at 30,000 boxes? Why does the degree of operating leverage change as the quantity sold increases?d. If the firm has an annual interest expense of $10,000, calculate the degree of financial leverage at both 20,000 and 30,000 boxes.e. What is the degree of combined leverage at both sales levels?
Pisa has not performed spectacularly to date. However, it wishes to issue new shares to obtain $100,000 to finance an expansion into a promising market.
On May 20, 2004, The Wall Street Journal ran a front page story entitled "Biotech's Dismal Bottom Line: More Than $40 Billion in Losses. " The article makes many points.
Determine effective borrowing rate for a 1-year line of credit, if the total credit line = $3,000,000, average loan outstanding = $1,400,000, commitment fee = 0.5 percent on the unused portion,
Consider an American bond with an effective duration (which is pretty much the same as modified duration, but more precise) of 6.76 years having a yield to maturity of 7% and interest rates are expected to rise by 50 basis points.
The firm has a tax rate of 30 percent, an opportunity cost of capital of 0 percent, and it expects net working capital to increase by $93,000.00 at the beginning of the project.
Briefly discuss the impact of the changes in asset turnover and financial leverage on ROE over the the three years.
Pullman, Corporation, a United State firm, has been highly profitable, but prefers not to pay out higher dividends because its shareholders want the funds to be reinvested.
Average Weighted Cost of Capital, Risk Premium, debt to equity and the Current assets of GPC Genuine Parts Company for the most recent 5 years.
Research United and Continental Airline merger, measure the challenges experienced during the merger and resulting impact to the business.
Based on information given above, compute the cost of borrowing by using debt for present company.
Dell a leading computer technology organization has established a high ethical standard of doing business with customers, vendors, stakeholders, suppliers and shareholders.
A firm is reviewing a project with labor cost of dollar 9.90 per unit, raw materials cost of $22.63 a unit, and fixed costs of dollar 8,000 a month. Sales are projected at 10,000 units over the three-month life of the project.
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