Operating leverage at financial break-even level of output

Assignment Help Financial Management

Reference no: EM13917475

A project has the following estimated data: price = $50 per unit; variable costs = $32 per unit; fixed costs = $14,000; required return = 10 percent; initial investment = $20,000; life = four years. Ignoring the effect of taxes, what is the accounting break-even quantity? (Round your answer to 2 decimal places. (e.g., 32.16)) Break-even quantity What is the cash break-even quantity? (Round your answer to 2 decimal places. (e.g., 32.16)) Break-even quantity What is the financial break-even quantity? (Round your answer to 2 decimal places. (e.g., 32.16)) Break-even quantity What is the degree of operating leverage at the financial break-even level of output? (Round your answer to 3 decimal places. (e.g., 32.161)) DOL?

Reference no: EM13917475

Questions Cloud

What will be the new portfolio beta : You have a portfolio with a beta of 1.59. What will be the new portfolio beta if you keep 86 percent of your money in the old portfolio and 14 percent in a stock with a beta of 0.58? (Do not round intermediate calculations and round your answer to 2 ..

This debt must be repaid in two equal installments : ABC Corp has the opportunity to invest $1 million now (t=0) and expects after-tax returns of $600,000 in t=1 and $700,000 in t=2. The project will last for two years. The appropriate cost of capital is 12% with all-equity financing, the borrowing rat..

Estimate the additional amount of time needed to finish : The fifth unit of a 10 unit job took five hours to complete. The sixth unit has been worked on for two hours, but is not yet finished. Estimate the additional amount of time needed to finish the 10 unit job if the work has a 75 percent learning r..

What is the variable cost per unit-cash break-even point : Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $15.80 per unit, and the variable labor cost is $6.50 per unit. a. What is the variable cost per unit? what is the cash break-even point? If depreciation is $500,..

Operating leverage at financial break-even level of output : A project has the following estimated data: price = $50 per unit; variable costs = $32 per unit; fixed costs = $14,000; required return = 10 percent; initial investment = $20,000; life = four years. Break-even quantity What is the degree of operating..

Bond with ten percent coupon rate bond : A bond with a $1,000 par value has an 8 percent annual coupon rate. It will mature in 4 years, and annual coupon payments are made at the end of each year. Present annual yields on similar bonds are 6 percent. What should be the current price? A bond..

What is the market value of common stock : Ms. Manners Catering (MMC) has paid a constant $1.50 per share dividend to its common stockholders for the past 25 years. MMC expects the next dividend to increase at a constant rate equal to 7 percent per year into perpetuity. Investors require a 12..

Techniques for specific engineering business functions : Identify and describe appropriate costing techniques for specific engineering business functions. ACE Engineering Limited manufactures high quality electric drills for use in the medical industry. The financial director is considering next year's pro..

What is accounting break-even point-cash break-even point : Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable material cost is $12.40 per unit, and the variable labor cost is $6.80 per unit. a. What is the variable cost per unit? what is the accounting break-even point? Cash break-even poi..

User Account

All Pages