Company to finance external financing need through debt

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Reference no: EM131813979

1. Y3K, Inc., has sales of $7,535, total assets of $3,555, and a debt−equity ratio of .40. Assume the return on equity is 16 percent.

What is its net income? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

2. Discuss whether it is appropriate for the company to finance the external financing need through debt.

3. Analyse the relevance and importance of degree of operating leverage to a manufacturing company.

Reference no: EM131813979

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