Calculate that the degree of operating leverage

Assignment Help Financial Management
Reference no: EM13885323

At an output level of 48,000 units, you calculate that the degree of operating leverage is 1.40. If output rises to 60,960 units, what will the percentage change in operating cash flow be? (Do not round your intermediate calculations.)

37.80%

29.76%

39.69%

38.93%

35.91%

Reference no: EM13885323

Questions Cloud

Non-depreciating assets : Will-O-Wind Airlines always invests (in non-depreciating assets) 20% of its earnings, which will be next period (Period 1) $3 per share. The rest it pays out as dividends. Its investment opportunities currently earn (and are expected to earn in the i..
What is estimated cost of equity using average of CAPM : Stock in Initrode Software has a beta of 0.78. The market risk premium is 9.9 percent while T-bills are currently yielding 5.5 percent. Initrode's most recent dividend was $1.6 per share, and dividends are expected to grow at a 7 percent annual rate ..
Operating leverage at financial break-even level of output : A project has the following estimated data: price = $89 per unit; variable costs = $33.82 per unit; fixed costs = $5,100; required return = 10 percent; initial investment = $11,000; life = seven years. Ignore the effect of taxes. What is the financia..
Explain little more stock market and the risks involved : Determine whether stock prices are affected more by long-term or short-term performance. Provide one (1) example of the effect that supports your claim. Explain little more stock market and the risks involved
Calculate that the degree of operating leverage : At an output level of 48,000 units, you calculate that the degree of operating leverage is 1.40. If output rises to 60,960 units, what will the percentage change in operating cash flow be? (Do not round your intermediate calculations.)
Two chemical corporations both equity financed with no debt : Two chemical corporations, both equity financed with no debt, are essentially in the same business. However, whereas one of the corporations has a stable earnings and dividend record, paying out all its earnings in dividends, the other is a growth st..
Inflation rate averages-principle plus interest : How much will you pay for a $10,000 automobile in 20 years if the inflation rate averages 5% per year for 20 years? You borrowed $25,000 from your parents to buy a car. They want their money back in 5 months with interest at 6% (simple interest rate)..
Approximate cost of giving up cash discount from supplier : Prairie Manufacturing has four possible suppliers, all of which offer different credit terms. Except for the differences in credit terms, their products and services are virtually identical. Calculate the approximate cost of giving up the cash discou..
Account that pays interest at rate : You make a deposit of $1,000 in an account that pays interest at a rate of 12% compounded quarterly. In two years, the balance will be John won the lottery. The state offers to pay him $1 million up front or a series of 25 payments of $50,000 per yea..

Reviews

Write a Review

Financial Management Questions & Answers

  Fast growing technology company

Starskeep, Inc., is a fast growing technology company. The firm projects a rapid growth of 40 percent for the next two years and then a growth rate of 20 percent for the following two years. After that, the firm expects a constant-growth rate of 8 pe..

  Expected rate of return from this investment opportunity

James Fromholtz is considering whether to invest in a newly formed investment fund. Based on these potential outcomes, what is your estimate of the expected rate of return from this investment opportunity? I know this is 22.5%. Calculate the standard..

  Compute its intrinsic value

A bond was issued 2 years ago. It's original maturity was 20 years. The coupon rate is 4% and the current YTM is 6%. Compute its intrinsic value.

  What is the current share price-dividends

Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $24, $15, $5.6 and $2.8. Afterwards, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the s..

  Create a retirement party fund

Suppose that you want to create a "retirement party fund" for yourself and place $50 in a bank account for each of the next 20 years. If that account earns an annual rate of return of 7%, how much will be in your retirement party fund at the end of t..

  Attempting to value a call option with an exercise price

You are attempting to value a call option with an exercise price of $108 and 1 year to expiration. The underlying stock pays no dividends, its current price is $108, and you believe it has a 50% chance of increasing to $130 and a 50% chance of decrea..

  Find the weighted average cost of capital

Based on the information below, calculate the weighted average cost of capital -Two thousand shares of preferred are outstanding, each of which pays an annual dividend of $7.50. They originally sold to yield 15% of their $50 face value. They''re no..

  What is the required return on the companys stock

Tell Me Why Co. is expected to maintain a constant 4.8 percent growth rate in its dividends indefinitely. If the company has a dividend yield of 6.6 percent, what is the required return on the company’s stock?

  Health care manufacturing downloaded from harvard cousepack

Case HEALTH CARE MANUFACTURING downloaded from Harvard cousepack, SEE THE IS/BS MODEL & FLOW DIAGRAM TABS -YOU ARE NOW WORKING WITH RATIOS, FORECASTS, VALUATION, POSSIBLY FINANCING

  Estimate of the net present value

An analysis of what happens to the estimate of the net present value when you examine a number of different likely situations is called _____

  Consultancy report for anthonyrsquos orchard as your

as your project for financial and performance management you will prepare and submit a consultancy report to the

  Marginal tax bracket

Builtrite Auto has preferred stock shares outstanding that pay an annual dividend of $8 and are currently selling for $86 a share. What is the after-tax cost of preferred stock if the flotation cost for new shares is 5% and Builtrite is in the 34% ma..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd