Calculate operating breakeven point in units

Assignment Help Financial Management
Reference no: EM131519141

Play-More Toys produces inflatable beach? balls, selling 380,000 balls per year. Each ball produced has a variable operating cost of $ 0.89 and sells for $1.24.

Fixed operating costs are $34,000.

The firm has annual interest charges of $6,400?,

preferred dividends of $1,500?, and a 40% tax rate.

a. Calculate the operating breakeven point in units.

b. Use the degree of operating leverage? (DOL) formula to calculate DOL.

c. Use the degree of financial leverage? (DFL) formula to calculate DFL.

d. Use the degree of total leverage? (DTL) formula to calculate DTL. Compare this to product of DOL and DFL calculated in parts ?(b?) and ?(c?).

Acutal Questions

a. The operating breakeven point in units is units. ?(Round to the nearest? integer.)

b. The degree of operating leverage is ? (Round to four decimal? places.)

c. The degree of financial leverage is ?(Round to four decimal? places.)

d. The degree of total leverage is ?(Round your answer to two decimal? places.)

Compare this to the product of DOL and DFL calculated in parts ?(b?) and? (c?).

The degree of total leverage is (Round your answer to two decimal? places.)

Reference no: EM131519141

Questions Cloud

Research online dating sites : Research online dating sites. Name site you have reviewed. What do they promise? Are they creating a picture of romantic love or do they promise consummate love
Provide an economic impact analysis : 1. Please select a bill currently in congress and provide an economic impact analysis.
Discuss schedule of information of budgeted profit statement : The manager of Ritzy Rooms, a small 40-room Saskatchewan roadside motel, is seeking a $90,000 bank loan bearing a 10% annual rate of interest.
What the challenges and emotional tasks of young adulthood : What are the challenges and emotional tasks of young adulthood? Are they the same as those that your grandparents faced
Calculate operating breakeven point in units : Play-More Toys produces inflatable beach? balls, selling 380,000 balls per year. Calculate the operating breakeven point in units.
Two of the international planning process : In phases one and two of the international planning process, countries may be dropped from further consideration as potential markets.
Describe the development of fantasy play : Describe the development of fantasy play and its importance for cognitive and social development
Determine the selling expenses consist of salespersons : Determine the Selling expenses consist of salespersons' salaries $80,000, depreciation on equipment $10,000, advertising $13,000, and sales commissions $6,000.
Discuss the importance of emotional communication : Discuss the importance of emotional communication during infancy and its impact on the developmental process for both the child and the parent

Reviews

Write a Review

Financial Management Questions & Answers

  What rate of return in order to achieve this goal

Franklin Templeton has just invested $9,260 for his son (age one). This money will be used for his son’s education 18 years from now. He calculates that he will need $71,231 by the time the boy goes to school. what rate of return will mr. templeton n..

  What is the bonds price-stated as a percent of par

The bond is currently priced to yield 3.6%. What is the bond's price, stated as a percent of par?

  What is the price-earnings ratio and dividends per share

What are dividends per share? What is the price-earnings ratio?

  Annually in mutual fund

You invest $4,000 annually in a mutual fund that earns 10 percent annually, and you reinvest all distributions. ou invest $4,000 annually in a mutual fund with a 6 percent load fee so that only $3,760 is actually invested in the fund. The fund earns ..

  Roles of homemade leverage

Define and discuss MM Proposition I with its implications, and the roles of homemade leverage and the Law of One Price in the development of the proposition.

  Net profit margin have to be in order to desired growth rate

Rowan Company has a net profit margin of 8.3 percent, debt ratio of 50 percent, total assets of $5,087,200, sales of $6,738,600, and a dividend payout ratio of 65 percent. The firm’s management desires a sustainable growth rate (SGR) of 12 percent bu..

  What is the break-even EBIT

Rise Against Corporation is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 200,000 shares of stock outstanding. Under Plan II, there would be 150,000 shares o..

  What would be an appropriate estimate of stock price today

A company is expected to pay a dividend of $1.36 per share one year from now and $1.72 in two years. You estimate the risk-free rate to be 5% per year and the expected market risk premium to be 5.8% per year. In two years, you expect the leading PE r..

  Ingore effect of taxes-mentioned objectives

INGORE effect of taxes. Additionally assume all dollar amounts and discount rates are REAL. Today at age 45, Ken is meeting his financial advisor, Barbie, to set up a retirement plan. Ken is currently making $12,000 per month. How much does he need t..

  Annual after-tax return on your savings for planning horizon

Suppose you plan for your 6 year-old child to go to college starting at age 18. You think the college costs will be $20,000/year for 4 years when the time comes. You expect an average 4% annual after-tax return on your savings for your planning horiz..

  What is the present value per year

What is the present value of $1,100 per year, at a discount rate of 10 percent if the first payment is received 6 years from now and the last payment is received 30 years from now?

  Retirement and have just started your first job

Assume that you have 40 years until retirement and have just started your first job. Once you retire, you anticipate that you will live for 30 additional years. Assume that you will require $100,000 per year to support yourself in retirement.

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