What is the degree of operating leverage

Assignment Help Finance Basics
Reference no: EM132371621

A project has the following estimated data: price = $80 per unit; variable costs = $40 per unit; fixed costs = $10,000; required return = 10 percent; initial investment = $12,000; life = 5 years. Ignore the effect of taxes. What is the degree of operating leverage at the financial break-even level of output?

Reference no: EM132371621

Questions Cloud

Calculate the account balance six months from today : Assuming no further deposits or withdrawals are made, Calculate the account balance six months from today.
What is the company cost of newly issued equity : New stock can be sold to the public at the current price, but a flotation cost of 8% would be incurred. What is the company's cost of newly issued equity?
What is the weighted average cost of capital : If the tax rate is 34 percent, what is the weighted average cost of capital?
What are the mean-standard deviation and variance : What are the mean, standard deviation, and variance in degrees Celsius?
What is the degree of operating leverage : What is the degree of operating leverage at the financial break-even level of output?
How many cups of coffee must it sell to break-even on a cash : The sales price is $1.50 per cup while the variable cost per cup is $0.60. How many cups of coffee must it sell to break-even on a cash basis?
Why are investors risk-averse : Why are investors risk-averse? How can investors deal with different degrees of risk? Justify your answer.
Research paper on Implication of GDPR on US firm : T578 Independent Research Project - Draft a cybersecurity research paper on a topic - Implication of GDPR on US firm. Need a basic statement for topic
Compute the eps for the three plans : Ignoring taxes, compute the EPS for each of the three plans. Which of the three plans has the highest EPS? Which has the lowest?

Reviews

Write a Review

Finance Basics Questions & Answers

  Payout ratio stay constant for the next four years

Assume that ROE and payout ratio stay constant for the next four years. After that, competition forces ROE down to 11% and the company increases

  Is the given statement is true or false

"If two events are mutually exclusive, they must not be independent events." - Is this statement true or false? Explain your choice.

  Principal and coupon payment

What principal and coupon payment was made on January? 15, 2030?

  Advantages and disadvantage of debt financing for a business

advantages and disadvantages of debt financing for a business

  Long incubation period infects a population of people

When a rare respiratory disease with a long incubation period infects a population of people, there is only a probability of 1/3 that an infected patient will show the symptoms within the ?rst month.

  What is the value in today dollars

Your company recently bought a new metal stamping machine. It estimates that the operating costs will be $1000 for the first year and these costs are expected.

  Should leasing company accept alians offer

(Present value) A construction company called Alians Group is considering buying new machinery for one of its projects. Leasing Company, which deals in heavy.

  How many full months does the increased payment save

A person takes out a a 4-year car loan of $25,000 with a fixed rate of 4.8% that compounds monthly. Suppose the vehicle owner simply pays an extra $100 towards.

  What would be the firm new receivables balance

If the electronic claims system costs $30,000 a year to lease and operate, should it be adopted? (Assume that the entire receivables balance has to be financed)

  Irs for this building for tax years

What is the depreciation expense allowed by the IRS for this building for tax years 2017? and 2018?

  If a firms roe is low and management wants to improve it

if a firms roe is low and management wants to improve it explain how using more debt might

  Use of debt intensifies the firm''s business risk borne

The use of debt intensifies the firm's business risk borne by the common stockholders. As a result, shareholders of a firm with higher debt ratio would require a higher return compared to a similar firm without debt

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