Compare the relative risk of both companies

Assignment Help Financial Management

Reference no: EM131555362

Company X has a sales price of $4.00 per unit and a variable cost of $3.40 per unit; fixed costs are $13,000, no debt, and sales of 250,000 units per year. Company Y has a sales price of $10.00 per unit and a variable cost of $7.00 per unit with fixed costs of $135,000 and sales of 200,000 units per year. Company Y also has interest payments of $60,000 annually. Both companies are in the 40% tax bracket.

a. compute DOL, DFL, and DCL for Company X

b. compute DOL, DFL, and DCL for Company Y

c. compare the relative risk of both companies

Reference no: EM131555362

Questions Cloud

What are your thoughts on the controversy : What are your thoughts on this controversy? Avoid "talking head" positions. Offer the class a supportable argument.

Who is the dominant player in the marketplace : Is the industry growing?What is the market share for the organization that they represent?Who is the dominant player in the marketplace?

Determine the subspace : Determine if y is in the subspace of R4 spanned by the columns of A, where.

Why your question is important to you as a member of society : Explain why your question is important to you as a member of society? Explain why studying human behavior and identity is a valuable human endeavor

Compare the relative risk of both companies : Company X has a sales price of $4.00 per unit and a variable cost of $3.40 per unit; compare the relative risk of both companies.

What alkylate is formed when isobutane reacts with propylene : An alkylate is added to gasoline to improve its combustion. What alkylate is formed when isobutane reacts with propylene?

Standard deviation of the mean : For the standard normal distribution, find the area within one standard deviation of the mean that is, the area between µ - s and µ + s. Round to four decimal

Evidence of discrimination in disparate treatment cases : Should the court require actual evidence of discrimination in disparate treatment cases rather than permitting an interference?

What are the strengths and protective factors : List the risk factors in Jennifer's life; focus on family, culture, and gender. What the strengths and protective factors that result from her cultural group

User Account

All Pages