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...

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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 $16 per unit. Q3. Suppose 75,000 units are sold. Compute the margin of safety in units and dollars. Q4. What does this tell you about the risk of Morrison making a loss? What are the most likely reasons for this risk to increase?
What will the percentage change in operating cash flow?
Now suppose that annual unit sales, variable cost, and unit price are equal to their respective expected values—that is, there is no uncertainty. Determine the company's annual profit for this scenario. Round answer to a whole number, if needed.$
Imagine that you could increase the price for a product that has a profit margin of 8% on its price. If you could increase the price by 1% AND simultaneously keep the sales volume (in unit terms) at the same level as before the price increase, calculate the impact of this price increase on the profit margin. (For this question, assume there are no fixed costs. You just need to calculate the PERCENTAGE CHANGE in profit margin)
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?
refer to below table ,Conduct a sensitivity analysis to determine the sensitivity of NPV to changes in the sales price, number of units sold, the variable costs per unit, fixed costs and the cost of capital. Set these variables’ values at 10% above and 10% below their base-case values. 2. Include a graph in your analysis with below table? 10% above Year Net Cash Flow (RM) Discount Rate (13.20%) Present Value (RM) 0 -1,217,800.00 1 -1217800 1 328,750.00 0.883392 290415.19 2 337,330.00 0.780382 263246.2 3 346,423.15 0.689383 238818.31 4 355,195.10 0.608996 216312.32 5 614,461.20 0.537982 330569.16 NPV 121561.19 10% below Year Net Cash Flow (RM) Discount Rate (10.80%) Present Value (RM) 0 -1,145,800.00 1 -1145800 1 184,000.00 0.902527 166064.98 2 185,395.00 0.814555 151014.45 3 189,459.85 0.735158 139282.93 4 193,936.89 0.6635 128677.14 5 448,143.25 0.598827 268360.17…
Suppose a ceiling fan manufacturer has the total cost function C(x) = 35x + 1200 and the total revenue function R(x) = 65x. (a) What is the equation of the profit function P(x) for this commodity? P(x) = (b) What is the profit on 20 units? P(20) = Interpret your result. The total costs are less than the revenue. The total costs are more than the revenue. The total costs are exactly the same as the revenue. (c) How many fans must be sold to avoid losing money? fans
A product is currently reported on the balance sheet at a cost of $29. The selling price of the product is currently $30 and disposal costs are $3. If the company had to buy the product today, it would pay $28. The product has a normal profit margin on sales of 30%. What amount should the product be valued at under each of the following methods? Lower of Cost or Market (LCM) Lower of Cost of Net Realizable Value (LCNRV)
As in the numerical example we discussed in our presentations, the inverse demand function for the depletable resource is given by P = 10-0.4qt, where P is the price in dollars and qt is the quantity in period t. The marginal cost of extraction is constant at $3. A total of 25 units of the resource is available to be allocated between two periods. Given a discount rate of 10%, answer the following questions: (a) In a dynamically efficient allocation, how much of the resource would be allocated to the first period and how much to the second period? (b) Given this discount rate, what would be the efficient price in the two periods? • First period price Po: 2.685 • Second period price P₁: 2.315 (c) Can you graphically represent the efficient allocation? (d) What would be the marginal user cost in each period? Can you explain the path of the MUC?
CVP analysis, margin of safety. Suppose Morrison Corp.’s breakeven point is revenues of $1,100,000. Fixed costs are $660,000. Required: Compute the contribution margin percentage. Compute the selling price if variable costs are $16 per unit. Suppose 75,000 units are sold. Compute the margin of safety in units and dollars. What does this tell you about the risk of Morrison making a loss? What are the most likely reasons for this risk to increase?
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