A project has following estimated data: Price = $60 per unit; variable cost = $30 per unit; Fixed cost = $100,000; Company has borrowings of $100,000 at a rate of 10%. %3D Calculate the combined leverage of the project when units sold are 10,000 units. a. 1.58 b. 0.63 c. 1.50 d. 1.05

A project has following estimated data: Price = $60 per unit; variable cost = $30 per unit; Fixed cost = $100,000; Company has borrowings of $100,000 at a rate of 10%. %3D Calculate the combined leverage of the project when units sold are 10,000 units. a. 1.58 b. 0.63 c. 1.50 d. 1.05

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

A project has following estimated data:
Price = $60 per unit; variable cost = $30 per unit3;
Fixed cost = $100,000;
Company has borrowings of $100,000 at a rate of 10%.
%3D
Calculate the combined leverage of the project when units sold are 10,000 units.
a.
1.58
b. 0.63
C.
1.50
d. 1.05
Answer
B.
U:
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2:34 PM
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D:
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02-Dec-20
DELL

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