provide correct answer Everest Technologies is managing a project with a degree of operating leverage of 1.15. Ifthe number of units sold increases by 7.8%, what will be the percentage change in operatingcash flows?Options:A) 7.80% decreaseB) 8.97% increaseC) 6.78% increaseD) 9.20% increase

To calculate the percentage change in operating cash flows, we use the formula:Percentage Change in…

Answered: Everest Technologies is managing a…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...

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A project has fixed costs of $400 per year, depreciation charges of $400 a year, annual revenue of $3,600, and variable costs equal to two-thirds of revenues. a. If sales increase by 17%, what will be the percentage increase in pretax profits? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is the degree of operating leverage of this project? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
A project has fixed costs of $1,300 per year, depreciation charges of $500 a year, annual revenue of $8,100, variable costs equal to two-thirds of revenues and the tax rate is 20%. a. If sales increase by 10%, what will be the increase in pretax profits? Increase in pretax profits % b. What is the degree of operating leverage of this project? (Round your answer to 1 decimal place.) Degree of operating leverage times
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A project has fixed costs of $2,100 per year, depreciation charges of $600 a year, annual revenue of $10,800, and variable costs equal to two-thirds of revenues. a. If sales increase by 20%, what will be the percentage increase in pretax profits? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) What is the Pretax profits increase (%)? b. What is the degree of operating leverage of this project? (Do not round intermediate calculations. Round your answer to 2 decimal places.) What is the degree of operation leverage?
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Give typing answer with explanation and conclusion What is the change in the NPV of a one-year project if fixed costs are increased from $400 to $600, assuming the firm is profitable, has a 21% tax rate, and a 12% cost of capital.
Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated revenue producing lite of 4 years. Mason has a required rate of return that is 12% and a cost of capital of 11%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
If a company has project revenues of solve these questions

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Everest Technologies is managing a project with a degree of operating leverage of 1.15. If the number of units sold increases by 7.8%, what will be the percentage change in operating cash flows? Options: A) 7.80% decrease B) 8.97% increase C) 6.78% increase D) 9.20% increase