Cost volume and profit analysis

Assignment Help Financial Management
Reference no: EM131188095

Cost-Volume- Profit Analysis-Cost-Volume- Profit (CVP) is an excellent tool for analyzing short-term financial decisions. Assume the following current information: sales price per unit $7.50 total fixed costs $250,000 unit volume 125,000 What does the variable cost per unit need to be in order to break even (operating margin becomes $0) at this volume? a. $7.50 b. $5.50 c. $2.00 d. $6.50 e. none of the above Answer is b. Prove It Below

Reference no: EM131188095

Questions Cloud

Business equipment eligible for section : A small business has a taxable income of $95,650 this year, and has purchased $118,450 of business equipment eligible for a section 179 deduction. What is the maximum section 179 deduction that can be taken? Taking this deduction, what is the year 1 ..
Overall or weighted average-stockholders required return : The treasury operation of Douglas Co. has provided the following information to Business Development so they can estimate their Cost of Capital (Overall or Weighted Average) for applications in appropriation requests: Cost of Debt Pre-tax 6% Marginal..
Excellent tool for analyzing short-term financial decisions : Cost-Volume- Profit Analysis. Cost-Volume- Profit (CVP) is an excellent tool for analyzing short-term financial decisions. Assume the following current information: sales price per unit $7.50 total fixed costs $250,000 Manufacturing is able to get th..
What is the theoretical futures price : Suppose there is a financial asset ABC, which is the underlying asset for a futures contract with settlement six months from now. You know the following about this financial asset and the futures contract: What is the theoretical (or equilibrium) fut..
Cost volume and profit analysis : Cost-Volume- Profit Analysis-Cost-Volume- Profit (CVP) is an excellent tool for analyzing short-term financial decisions. Assume the following current information: sales price per unit $7.50 total fixed costs $250,000 unit volume 125,000 What does th..
What is the companys cost of equity capital : Crosby Industries has a debt-equity ratio of 1.5. Its WACC is 9.1% and its cost of debt is 5.5%. There is no corporate tax. What is the company's cost of equity capital? What would the cost of equity be if the debt-equity ratio were 2.0?
Calculate cost of common equity financing using gordon model : Last year the Black Water Inc. paid dividends $2.92. Company's dividends are expected to grow at an annual rate of 3% forever. The compnay's common stock is currently selling on the market for $86.52. The investments banker will charge flotation cost..
What is before-tax cost of capital for this debt financing : Black Hill Inc. sells $100 million worth of 13-year to maturity 11.39% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $973 for each $1,000 bond. What is the before-tax cost of capital for this debt financing?
After-tax market rate of return on development investments : The research and development division of a large corporation is considering the purchase of a new tunneling X-ray microscope for $320,125. The projected net benefits from gains in materials engineering is projected to be $127,000 in today’s real doll..

Reviews

Write a Review

Financial Management Questions & Answers

  Key variables in the owner wealth maximization process

The key variables in the owner wealth maximization process are _____

  Portfolio of investment in two stocks

You own a portfolio of investment in two stocks, A and B. Total investment in stock A is valued at $6,500 and has an expected return of 11.2 percent. Stock B has an expected return of 8.1 percent. Total investment in stock B is $3,500. What is the ex..

  What is the market value of the firms equity and debt

Equity as an Option   Sunburn Sunscreen has a zero coupon bond issue outstanding with a $20,000 face value that matures in one year. The current market value of the firm's assets is $23,200. Based on the Black–Scholes model, what is the market value ..

  Three-month european call option on the market index

An investor purchases a three-month European call option on the market index with an exercise price of $1000 for a premium of $10. After three months, the market index spot price is $1011 and the investor’s position is closed. Find the rate of return..

  Identify the five basic functions of management

Identify the five basic functions of management, and describe each function. Briefly describe how such functions are used in the context of internal analysis.

  Analysis of past monthly movements in stock price produces

Analysis of past monthly movements in IBM's stock price produces the following estimates: α = 2.5% and β = 1.6. If the market index subsequently rises by 12% in one month and IBM's stock price increases by 20%, what is the abnormal change in IBM's st..

  What is the current value of the lease

Your car dealer is willing to lease you a new car for $299 a month for 60 months. Payments are due on the first day of each month starting with the day you sign the lease contract. If your cost of money is 4.9%, what is the current value of the lease..

  Estimate its optimal capital structure

Simon Software Co. is trying to estimate its optimal capital structure. Right now, Simon has a capital structure that consists of 20% debt and 80% equity, based on market values. (Its D/S ratio is 0.25.) The risk-free rate is 6% and the market risk p..

  Coupon bonds outstanding with a current market price

Redesigned Computers has 6.5 percent coupon bonds outstanding with a current market price of $832. The yield to maturity is 16.28 percent and the face value is $1,000. Interest is paid semiannually. How many years is it until these bonds mature? A. 2..

  Explain bank''s asset portfolio and liability portfolio

What is the weighted average duration of bank's asset portfolio and liability portfolio? What is the leverage-adjusted duration gap?

  What benefits are gained from research planning and the

question 1.what benefits are gained from research planning and the analysis of financial statements? include sources

  What after-tax net cash flow will western receive

Western Textiles is trying to determine whether to purchase a new weaving machine that costs $214,000. It would cost another $26,000 to install the machine. If its marginal tax rate is 40 percent, what after-tax net cash flow will Western receive whe..

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!

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