User Account

All Pages

Calculate the degree of operating leverage

Assignment Help Managerial Accounting
Reference no: EM132992701

Conly expects sales of silicon chips to be R30 million this year.

  • Because this is a very capital-intensive business, fixed operating costs are R10 million.
  • The variable cost ratio is 40%.
  • The company's debt obligations consist of a R2 million, 10% bank loan and a R10 million bond issue with a 12% coupon rate.
  • The company has 100,000 shares of preferred shares outstanding that pays a R9.60 dividend.
  • Conly has 1 million shares of common shares outstanding, and its marginal tax rate is 40%.

Required:

Problem 1: Calculate the following:

1.1. Degree of operating leverage.

1.2. Degree of financial leverage.

1.3. Degree of combined leverage.

1.4. EPS if sales decline by 5%.

Reference no: EM132992701

Questions Cloud

Establish ways to capture communication : Establish ways to capture communication and share innovative ideas and practices within the organization.
Compare simon four-phase decision-making model : Compare Simon's four-phase decision-making model to the steps in using GDSS (group discussion support system).
How sarbanes oxley act had addressed the governance : In the case of Enron and Worldcom. What went wrong in their financial system? How Sarbanes Oxley Act of 2002 had addressed those governance issues.
Issue of misconduct in the financial industry : Is the code of conduct the issue, or is the written code only a part of the issue of misconduct in the financial industry?
Calculate the degree of operating leverage : Conly expects sales of silicon chips to be R30 million this year. Because this is a very capital-intensive business, Calculate the Degree of operating leverage.
Corporate planning session : 1. Choose a company and explore it via their website or through actual interview conducted
Should the manager purchase the technology : What is the present value of the cost savings of the technology if the interest rate is 6 per cent? Should the manager purchase the technology?
Identify two key players in aviation insurance : Identify two key players in aviation insurance and explain each key player's function in the industry.
What is the lower limit of the interval : We want to find a 95% confidence interval for the true proportion of the population who favor the bill. What is the lower limit of the interval?

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

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