What is the operating income ? Das Corp had originally expected to earnoperating income of $150,000 in thecoming year. Das's degree of operatingleverage is 3.1. Recently, Das revised itsplans and now expects to increase sales by15% next year.What is the percent change in operatingincome expected by Das in the comingyear?

To calculate the percent change in operating income expected by Das Corp, we will use the degree of…

Answered: Das Corp had originally expected to…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 3P: Smiley Corporations current sales and partial balance sheet are shown here. Sales are expected to...

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Suppose the company has just the opposite news and now expects unit sales for August, September, and October to be double (200%) the original estimates. What effect will this have on the company’s net income and borrowing? Explain your findings.
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The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $200,000 per year for the next 5 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 10% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $68 and variable costs at 80% of revenue. The company’s policy is to pay out two-thirds of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 1,800 Fixed costs 68 Variable costs (80% of revenue) 1,440 Depreciation 80 Interest (8% of beginning-of-year debt) 24 Taxable income 188 Taxes (at 40%) 75 Net income $ 113 Dividends $ 75 Addition to…
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A company has profits of $38,982 this year and expects profits to decrease by $1,728 dollars per year over the next 12 years. If the profits will be continuously invested in an account bearing 6.2% APR compounded continuously, what is the 12-year present value of this income stream?
HiTech Electronics manufactures two new products,Tablets andTouch Screen Remotes, and sells them nationally to wholesalers andretailers. The HiTech management is very pleased with the company’sperformance for the current fiscal year. Projected sales throughDecember 31, 2022, indicate that 70,000Tablets and 140,000Remoteswill be sold this year. The projected earnings statement, which appearsbelow, shows that HiTech will exceed its earnings goal of 9 percent onsales after taxes.The Tablet business has been fairly stable for the last few years,and the company does not intend to change the Tablet price. However,the competition among manufacturers of Touch Screen Remotes has beenincreasing. HiTech’sRemotes have been very popular with consumers.In order to sustain this interest in theirRemotes and to meet the pricereductions expected from competitors, management has decided to reducethe wholesale price of its calculator from $22.50 to $20.00 per uniteffective January 1, 2023. At the same…

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Das Corp had originally expected to earn operating income of $150,000 in the coming year. Das's degree of operating leverage is 3.1. Recently, Das revised its plans and now expects to increase sales by 15% next year. What is the percent change in operating income expected by Das in the coming year?