User Account

All Pages

Calculate the degree of ?nancial leverge

Assignment Help Financial Accounting
Reference no: EM132490910

Veggies and Fruits Corner Inc. sells 30-pound bags of oranges to The Veterans Home facility for $12 per bag.The ?xed costs of this operation are $45,000, while the variable costs of Oranges are $4 per bag. Veggies and Fruits Corner Inc. has an annual interest expense of $50,000.

Question (a) Calculate the degree of ?nancial leverge (DFL) at 25,000 bags sold.

Question (b) Explain the concept of ?nancial leverage. What are the advantages and disadvantages?

(Hint: DFL = EBlT/EBlT-l)

Reference no: EM132490910

Questions Cloud

Presence of living organisms : There are so many ways we have benefited from the chemical industry and you've named a number of them in your post. I think there is probably
Need letters exact : Address on the envelope in the same format as the destination address. Do not print the return address in a larger font, and separate it clearly from
What is the break-even sales in units : An average of 2,300 cups are sold each month. What is the break-even sales in units? (Hint: Break-even sales in units = Fixed expenses /CM per unit)
What is the equilibrium temperature : A 1.00-kg block of ice at its melting point is placed in the room. Assume the walls of the room transfer no heat. What is the equilibrium temperature?
Calculate the degree of ?nancial leverge : Calculate the degree of ?nancial leverge (DFL) at 25,000 bags sold. Explain the concept of ?nancial leverage. What are the advantages and disadvantages?
Determine the wavelength of the photon emitted : Determine the wavelength of the photon emitted if the atom transitions from n = 273 to n = 272. Express your answer in cm using two significant figures.
Compute what is the break-even sales in dollars : An average of 3,250 slices of pizza are sold each month. What is the break-even sales in dollars? (Hint: Break-even sales = Fixed expenses /CM Ratio)
What is the wavelength of the red light : A barcode scanner operates at a frequency of 4.62 x 1014 s-1. What is the wavelength of the red light in nanometers emitted by the scanner?
Case - Protecting Privacy of Tax Returns : Case - Protecting Privacy of Tax Returns. Describe the potential privacy problems that could arise in each of the following three areas of processing

Reviews

Write a Review

Financial Accounting Questions & Answers

  Net operating profit margin and net operating asset turnover

Analysis and Interpretation of Profitability Balance sheets and income statements for 3M Company as follows.  Consolidated Statements of Income Years ended December 31$ millions 2010 2009 2008. Compute net operating profit after tax for 2010. Assume ..

  What happened to net working capital during the year

Its depreciation expenses were $0.3 million, and its total cash flow was $3.3 million. What happened to net working capital during the year?

  Purchase-related transactions

Purchase-Related Transactions- Mayn Co., a women's clothing store, purchased $27,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30. Mayn Co. returned $4,300 of the merchandise, receiving a credit memo, and then paid the..

  Prepare a schedule of expected cash collections from sales

Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below: Prepare a schedule of expected cash collections from sa..

  Flexible budgeted income statement using variable

flexible budgeted income statement using variable costing.downes consolidated industries international uses a standard

  Captain cook report as a liability for coupons

Captain Cook Cereal includes one coupon in each package of Granola that it sells and offers a puzzle in exchange for $2.50 and 3 coupons. The puzzles cost Captain Cook $3.40 each. Experience indicates that 30% of the coupons eventually will be redeem..

  What method of inventory accounting does farmer brothers use

How much did the company pay to stockholders in dividends in fiscal year 2015? What might impact the company's ability to pay dividends in future years? What methods of inventory accounting does Farmer Brothers use

  Explain inventory purchases budget

Breakeven analysis and margin of safety analysis (in units and sales dollars). The margin of safety analysis should assess three sales volume scenarios: best case, most likely, and worst case scenarios.

  Susceptible to direct sunlight

Dano has decided to start his own enterprise growing wheat grass in 2012.The particular strain of wheat grass he plans on growing is very susceptible to direct sunlight, so Dano buys a vacant home in Elk Grove

  What is the depreciable basis for the office equipment

Barber Corporation purchased all the assets of TECO Corporation for $1,820,000. An appraisal yielded the following: the building had a fair market value of $1,200,000; equipment a value of $1,000,000; and office equipment a value of $400,000. Wha..

  Prepare adjusting entry to record accrual of interest

On May 1, 2017, Herron Corp. issued $615,000, 9%, 5-year bonds at face value. The bonds were dated May 1, 2017, and pay interest annually on May 1. Financial statements are prepared annually on December 31. Prepare the adjusting entry to record the a..

  What is corporate social responsibility

Corporate Social Responsibility is not a luxury anymore, it is a requirement of all firms no matter how big or small.

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