User Account

All Pages

Calculate the cash flow cross over level of unit sales

Assignment Help Financial Accounting
Reference no: EM133015514

Question - Smith Brothers has a choice of two projects. Project A has annual fixed costs of $500,000 while project B has Annual Fixed costs of $2m. Project A has depreciation and amortization of $150,000 and project B has depreciation and amortisation of $450,000. The possible projects are for the sale of computer keyboards. These keyboards will sell for $30 each. The variable costs for project A are $12 and $5 for project B. The EBIT of project A is $500,000 and the EBITDA of Project B is $1.9m.

a) Calculate the Cash Flow Cross Over Level of Unit Sales.

b) Calculate the Accounting Cross Over Level of Unit Sales.

c) Calculate the Cash Flow DOL for Project A.

d) Calculate the Accounting Breakeven for Project A.

e) Calculate the Cash Flow Breakeven for Project B.

f) Calculate the Accounting DOL for Project B.

g) If the accounting cross over level of sales for a project is 2m units and you expect to produce and sell 5,060,000 units, would you invest in the project with the high or low fixed costs?

Reference no: EM133015514

Questions Cloud

How many check-ins can be forecasted for January : Using a weighted moving average with weights of 0.6, 0.3, and 0.1 (from most recent), how many check-ins can be forecasted for January
Determine the amount due the advertising agency : Determine the amount due the advertising agency that would be shown as a liability on RPG's balance sheet at the end of year 2
Calculate the standard and actual costs : The application standard rate is direct material quantity. And the application standard rate is $ 8/ KG. Calculate the standard and actual costs
Calculate the variance of the returns of ABC Company : Calculate the variance of the returns of ABC Company. Calculate the covariance of the expected returns of ABC Company and XYZ Company
Calculate the cash flow cross over level of unit sales : Project A has annual fixed costs of $500,000 while project B has Annual Fixed costs of $2m. Calculate the Cash Flow Cross Over Level of Unit Sales
Compute the future value : Compute the future value of $1,900 continuously compounded for 7 years at APR of 12 percent. Compute future value of $1,900 continuously compounded for 5 years
Prepare cash budget for January and February for Red Ltd : Other disbursements: Payment for purchase of office furniture $20,000 will be paid in February 2021. Prepare cash budget for January and February for Red Ltd
What are wings drawings for the first month : Wing started a business with dollar 5000 of capital in his first month of trading he made a profit of dollar 1600. What are wings drawings for the first month
Make the pre-acquisition entries as at July : As at 1 July 2020, Andrews Ltd. had a dividend payable liability of $30 000. Make the pre-acquisition entries as at 1 July 2020

Reviews

Write a Review

Financial Accounting Questions & Answers

  How much must invest today

Assume that you need to accumulate $12,000 at the end of years by investing an amount today. How much must you invest today

  Calculate the earnings per share

Assuming the preferred share dividends are one year in arrears, calculate the earnings per share if no preferred dividends are declared during the year

  Which contingent liabilities are

Which Contingent liabilities are? not recognised in the notes to the financial statements because the possibility of an outflow in settlement is remote.

  What is the tax status of the equipment

What is the tax status of the equipment (character of the property - i.e., inventory, capital asset, §1231 asset, etc.), -How much is his gain

  Prepare the journal entry that summarizes ecomotors employee

Prepare the journal entry that summarizes EcoMotors's employee share purchases for the year ending December 31, 2017. (If no entry is required)

  What the amount of cost that would be allocated to office

What the amount of cost that would be allocated to the office furniture is? Chesapeake Company paid $375,000 for a basket purchase.

  Prepare the statement of profit or loss as of december

The records of HACK TO CHOP Co. on December 31, 2021, Prepare the Statement of Profit or Loss and Other Comprehensive Income as of December 31, 2021

  What should be the minimum amount of profit contribution

1 square meter of plywood, and requires 2 hours of carpentry time. What should be the minimum amount of profit contribution per bed to be a viable product?

  Common stock outstanding

The company had 45,000 shares of common stock outstanding during the year. In addition, the company issued 3,000 shares of $50 par value preferred stock on January 3, 2016.

  Evaluate montes stock basis on december 31

What income and deductions will Monte and Allie report from Raider's current year activities? Evaluate Monte's stock basis on December 31?

  Find what is the role of the anz bank

What is the role of the ANZ bank? ANZ arranges financing for Super Duper Pty Ltd with a 90 day bank bill with a Face Value of $500,000.

  Prepare journal entry require to account for pension expense

Using the IFRS rules, prepare the journal entry required to account for pension expense for the current year. XYZ is a Swedish controlled private corporation.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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