Consider the previous question with the following new information: Fixed costs are assumed to be $550,000 per year. The company estimates the variable cost per unit (v) to be $120 and expects to sell each unit for $ 425. There are no taxes and the required rate of return is 17% per year. Suppose that sales are currently estimated to be 5400 units per year. What is the degree of operating leverage? Blank 1. Fill in the blank, read surrounding text. (Round to the CLOSEST 1 decimal place, ie 2.3) Using your answer from above, ESTIMATE what the new annual operating cash flow (OCF) will be if sales increase by 150 units: $ Blank 2. Fill in the blank, read surrounding text. (Round your answer to the nearest $1000, and do NOT use commas in your response, ie. 1234000)
Consider the previous question with the following new
information: Fixed costs are assumed to be $550,000
per year. The company estimates the variable cost per
unit (v) to be $120 and expects to sell each unit for $
425. There are no taxes and the required
is 17% per year. Suppose that sales are currently
estimated to be 5400 units per year. What is the degree
of operating leverage? Blank 1. Fill in the blank, read
surrounding text. (Round to the CLOSEST 1 decimal
place, ie 2.3) Using your answer from above, ESTIMATE
what the new annual operating cash flow (OCF) will be
if sales increase by 150 units: $ Blank 2. Fill in the blank,
read surrounding text. (Round your answer to the
nearest $1000, and do NOT use commas in your
response, ie. 1234000)
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