Cost-volume-profit analysis assumptions

Assignment Help Financial Management
Reference no: EM132033048

1. Tree Top Toys needs to finance their new production facility for spyglasses. The cost is $12 million.

They expect to payout $6 million or 40% of their net cash flow. Any external financing will be raised 80% borrowings and the remainder equity.

Unfortunately, the company has no internal excess short-term funds to use.

How much total equity cash flow will be used?

A. $0.6million.

B. $2.4 million.

C. $9.0 million.

D. $9.6 million.

E. $3.0 million.

2. Cost-Volume-Profit Analysis assumptions include which of the following:

a. Costs can be accurately separated into their variable and fixed components.

b. Both unit variable costs and total fixed costs remain constant.

c. Neither unit variable costs nor total fixed costs remain constant.

d. A and B are correct

e. A and C are correct

Reference no: EM132033048

Questions Cloud

How would you interpret this estimate : Investigators report an beta estimate of 0.34 for sodium intake (g/d) associated with hypertension status among a population US nurses aged 40-80 years
How do hebrew laws differ from those in hammurabis code : How do Hebrew laws differ from those in Hammurabi's Code? How do you think the laws of these respective civilizations dictated these differences?
Implied by the two outstanding debt issues : Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues.
Attendance rate per meeting-find the mean : A club has 225 members. If there is a 60% attendance rate per meeting, find the mean, variance, and standard deviation of the number
Cost-volume-profit analysis assumptions : Cost-Volume-Profit Analysis assumptions include which of the following:
What height is represented in the first quartile : If you are looking at woman ages 20-29 the mean height is 65.2 w a standard deviation of 2.92.
What is the company pretax cost of debt : Waller, Inc., is trying to determine its cost of debt. What is the company's pretax cost of debt?
How do journalists pyle and mauldin describe the war : How do journalists Pyle and Mauldin describe the war in Europe? Why was D-Day such a crucial event in the war?
Value of a stock varies day : Suppose the value of a stock varies each day from $12 to $27 with a uniform distribution. Find µ.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the effective annual interest rate on line of credit

In exchange for a $400 million fixed commitment line of credit, your firm has agreed to do the following: Pay 1.87 percent per quarter on any funds actually borrowed. Maintain a 1 percent compensating balance on any funds actually borrowed. what is t..

  Calculate the cash conversion cycle for the year

Calculate the cash conversion cycle for the year.

  When the current market rate for similar risk bonds

when the current market rate for similar risk bonds is 11.2%.

  Find the average return and standard deviation of returns

Find the average return and standard deviation of returns over the past 10 years.

  Firm latest annual financial results include the numbers

Your firm's latest annual financial results include the numbers listed below. Given these, what is total asset turnover?

  Offers medical flexible spending accounts to its employees

Ellen’s tax client is employed at a large company that offers medical flexible spending accounts to its employees.

  Independent of the political process in the united states

"Because the Fed does not have to ask Congress for money to fund its operations, the principal-agent view of the Fed's motivation cannot be correct."

  Contribute each year to fund your retirement

You will contribute the same amount to the plan at the end of every year that you work. How much do you need to contribute each year to fund your retirement?

  Feed manufacturer and purchase corn on regular basis

Suppose you are a feed manufacturer and purchase corn on a regular basis. You would like to protect against rising prices. You purchase a September corn futures contract at $3.70/bushel today and assume when you buy corn from your supplier in August,..

  What is the current spot exchange rate

The 90-day forward exchange rate is .01073033 dollars per yen. If this forward rate represents a per year premium of 2.5% from the current spot rate, what is the current spot exchange rate?

  Corporation and partnership producing

Under what circumstances might we see both corporation and partnership producing same goods and services in light of these required before-tax rates of return?

  What is present value of the annuity

A 20-year annuity pays $1,750 per month, and payments are made at the end of each month. what is the present value of the annuity?

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