Give true answer At an output level of 16,500 units, you havecalculated that the degree of operatingleverage is 2.80. The operating cash flow is$63,500 in this case. Ignoring the effect oftaxes, what are fixed costs? What will theoperating cash flow be if output rises to17,500 units? What will the operating cashflow be if output falls to 15,500 units?

The problem requires the determination of the fixed costs and operating cash flows. A fixed cost is…

Answered: At an output level of 16,500 units, you…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 4EB: Assume a company is going to make an investment in a machine of $825,000 and the following are the...

See similar textbooks

Similar questions

At an output level of 40,000 units, you calculate that the degree of operating leverage is 3.19. If the output rises to 44,000 units, what will the percentage change in operating cash flow be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage change in OCF
At an output level of 40,000 units, you calculate that the degree of operating leverage is 2.70. If output rises to 46,800 units, what will the percentage change in operating cash flow be? (Do not round your intermediate calculations.) Multiple Choice 45.90% 39.23% 48.20%
Suppose Morrison Corp.’s breakeven point is revenues of $1,100,000. Fixed costs are $660,000. Q1. Compute the contribution margin percentage. Q2. Compute the selling price if variable costs are $16 per unit. Q3. Suppose 75,000 units are sold. Compute the margin of safety in units and dollars. Q4. What does this tell you about the risk of Morrison making a loss? What are the most likely reasons for this risk to increase?
Assume the following (1) total sales = $200,000 (2) breakeven sales = $120,000, and (3) total fixed expenses = $50,000. Given these three assumptions, the margin of safety is: Multiple Choice $80,000. $30,000. $70,000. $150,000.
If TechCor has fixed cost of $60,000 variable costs of $1.20/unit, a sale price/unit of $7 and depreciation expense of $25,000 what is its cash break even in units?
If, Total Fixed cost OMR 40000, Selling price per unit OMR 20, and Variable cost per unit OMR 12. What will be the amount of profit if actual sales are OMR 120000?
Consider the basic setup of the Diamond-Dybvig (1983) model. Specifically, there are three periods, denoted t = 0, 1, 2, a single consumption good, and an illiquid investment opportunity that pays gross return 1 if liquidated at t = 1, or gross return 2.2 if liquidated at t = 2. There are 500 people in the economy, each endowed with 1 unit of the consumption good at t = 0. At t = 1, exactly 200 will randomly realize that they need to consume at t = 1 (the early consumers), the remaining 300 people will need to consume at t = 2 (the late consumers). The utility derived from consumption is 1 − (1/c1) 2 for early consumers, 1−(1/c2) 2 for late consumers, where the subscript denotes the time of consumption. Suppose a bank can offer an asset that is more liquid, with gross returns Rd 1 = 1.33 and Rd 2 = 1.71 (depending on the time of liquidation). (i) Calculate the bank’s profit after t = 2. In other words, what amount of funds remains at the bank once all depositors have withdrawn? Now…
Draw a cash flow diagram depicting the net cash flows associated with the purchase, operation, and disposition of a synthetic rubber blending machine. The cash flow components are shown below. Your CFD should have only one arrow at any given time period, reflecting the net of that period’s cash flows.
Sales Beer sales Food sales Other sales Total sales Less cost of sales Gross margin Less marketing and administrative expenses Operating profit of pursuing capital through private investors and financial insti Sales Beer sales (48% of total sales) Food sales (55% of total sales) Other sales (5% of total sales) Total sales Variable Costs Beer (15% of beer sales). Food (35% of food sales) Other (33% of other sales) Wages of employees (25% of sales) Supplies (1% of sales) Utilities (3% of sales) Other: credit card, miscellaneous (2% of sales) Total variable costs Contribution margin Fixed Costs Salaries: manager, chef, brewer Maintenance Advertising Other: cleaning, menus, miscellaneous Insurance and accounting Property taxes Depreciation $ 789,208 1,885,158 98,658 $ 1,973,000 530,738 $1,442,262 1,128,430 $ 313,832 Debt service (interest on debt) Total fixed costs Operating profit $ 789,200 1,885,158 98,650 $ 118,388 379,803 32,555 493,258 19,730 58,898 39,268 $ 135,500 30,200 28,200…
An engineer in charge of the design of a plant must choose either a batch or a continuous system. The batch system offers a lower initial outlay but, owing to higher labor requirements, exhibits a higher operating cost. The cash flows relevant to this problem have been estimated as follows: Check the values given for the discounted-cash-flow rate of return and net present worth. If the company requires a minimum rate of return of 10 percent, which system should be chosen?
Solve this early
Supply and demand curves for a consumer item are give by q = (s(p)=500 + p and q = D(p)=2300-2p respectively p is the price in dollars for one unit of this item and q is the umber of units. The equilibrium price is ' =$600 A sales tax of 3.2% to be directed at the consumers, is under consideration. Determine the amout of money per item that supplies stand to lose due to this tax which is directed at consumers.

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

SEE MORE TEXTBOOKS