Answered: If sales increase from $80,000 per year…

If sales increase from $80,000 per year to $120,000 per year, and if the operating leverage is 5, then net income should increase by: A. 167%. B. 100%. C. 334%. D. 250%.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...

See similar textbooks

Related questions

Q: R E Q U I R E D:Determine the amounts that would appear in the consolidated financial statements of…

A: To calculate the non-controlling interest (NCI) as of December 31, 2019, follow these…

Q: Sheridan's Market recorded the following events involving a recent purchase of merchandise: Received…

A: Received goods: $54,000Returned goods: -$1,400 (deduct from the total purchase cost)+$200 is the…

Q: A). Discuss what is meant by automatic exchange of information for International Tax and What are…

A: Approach to Solving the QuestionUnderstand the ConceptBegin by defining AEOI and its significance in…

Q: Need help. accounting

A: Step 1: Define Overhead CostThe overhead cost has two types of transactions while manufacturing the…

Q: Provide answer this accounting question

A: Step 1: Define Asset DisposalAccounting for asset disposal involves determining the asset's carrying…

Q: Artisan Inspiration, Inc. is a merchandiser of stone ornaments. The company sold 8,000 units during…

A: Step 1: Calculate Cost of Goods Sold (COGS)COGS = Beginning Inventory + Purchases (including Freight…

Q: What should be the price per share?

A: o find the price per share for the company's upcoming IPO, we need to calculate the present value of…

Q: Solve this general accounting question

A: Step 1: Define OverheadManufacturing overhead requires allocation as it cannot be traceable to the…

Q: Give true answer

A: Step 1: Define Manufacturing OverheadThe overhead cost is an indirect cost to incur during…

Q: What is the amount of taxes the company paid in 2008?

A: Step 1: Define Taxable IncomeIt is the portion of the income of an individual or an entity on which…

Q: Provide solution for this general accounting question

A: Step 1: Define Manufacturing OverheadManufacturing overheads can be described as the sum of all the…

Q: What is a good response to? Small businesses are increasingly vulnerable to cyber-attacks, which can…

A: DoS attacks are a major risk for small businesses as they flood their websites or networks with…

Q: Calculate the EPS

A: Explanation of Net Sales:Net Sales refers to the total revenue a company generates from its sales,…

Q: bb

A: Understanding the Payroll Taxes:Federal Unemployment Tax (FUTA): A federal tax levied on employers…

Q: Provide Answer step by step

A: Part 1: Straight-Line Depreciation for Jac Solutions Inc.Explanation of Cost of Equipment:The cost…

Q: hh

A: Approach to solving the question: For better clarity of the solution, I have attached the Excel…

Q: Haas Company manufactures and sells one product. The following information pertains to each of the…

A: Req 1: To get the break-even point in unit sales, we will use the following formula: BEP in unit…

Q: Need help with this accounting question not use ai

A: Step 1: Define Fixed Asset TurnoverIn the fixed asset turnover ratio the net sales value of a…

Q: Can you please answer the accounting question?

A: Step 1: Define Accrued ExpensesAccrued expenses are expenses that have been incurred but have not…

Q: Piefer Company sells refrigerators with an embedded 3-year warranty. During 2022, Piefer sold 15,000…

A: Step 1: Introduction to warranty expenseWarranty expense refers to the estimated costs that could be…

Q: Right answer

A: Explanation of Matching Principle:The matching principle is an accounting concept that requires…

Q: R E Q U I R E D:Determine the amounts that would appear in the consolidated financial statements of…

A: 1.Investment in Sam $4,200,000 Fair value (4,200,000 / 75%) 5,600,000Book value of Sam…

Q: General Accounting

A: Step 1: Define Net IncomeNet income is the sum of money earned by an individual or corporation over…

Q: View Policies Current Attempt in Progress The May transactions of Bramble Corporation were as…

A: Step 1:The journal entries to record the transactions is as follows: DateAccount Titles and…

Q: a variance is the difference between budgeted and actual results within a specific area of the…

A: As it draws attention to discrepancies between anticipated (budgeted) and actual outcomes in…

Q: please do them right. i will upvote.

A: Required A:Step 1: Determine the depreciable basis.Depreciable basis = Cost - Residual…

Q: Give true answer do fast with calculation

A: Step 1: Define CVP AnalysisIn management accounting, Cost-Volume-Profit (CVP) is an important…

Q: Do fast answer with correct calculation

A: Given:Loan Amount: $250,000Loan Term: 30 years (360 monthly payments)APR (Annual Percentage Rate) 1:…

Q: Solve this accounting problem not use ai

A: Step 1: Define Advertising ChargesAdvertising charges are the cost that is specifically spent to…

Q: Need help with this accounting question

A: Step 1: Define Loan PaymentsA loan borrowed by an individual or a firm is usually repaid by making…

Q: Need help.

A: Step 1:- Define Cost AllocationCost allocation is a means of delivering assistance to the cost…

Q: Need help with this accounting question not use ai

A: Step 1: Define Allowance MethodUnder the allowance method, there are two types of determining the…

Q: I need massive help with this accounting question please.

A: The ratios given in the schedule are for the probable collection. What we need is the probable loss…

Q: I need help.

A: First, let's organize the cost information:Beginning WIP: $1,050 ($250 + $800)Added this month:…

Q: Cullumber Lighting had a beginning inventory of 23 units at a cost of $7 per unit on August 1.…

A: Step 1: In the periodic inventory system, the inventory account is not updated at the time of each…

Q: Question Accounting

A: a. Market Value - this is the current value of an asset if it is bought or sold. This is often used…

Q: Provide correct answer

A: Step 1: Define Relevant CostingIn management accounting, the concept of relevant costing is…

Q: General Accounting Question

A: The proportion of a company that is financed by non-owners can be understood by looking at its…

Q: General Accounting

A: Explanation: In the given question, we are required to compute net income (or loss) for the month…

Q: None

A: Step 1: Determine the cost of goods sold.= ending inventory - purchases with freight in - beginning…

Q: ??

A: the total cost variance is the difference between the actual and standard costsin the problem, it…

Q: What is the amount of the net income? Accounting

A: Step 1: Define Return on Equity (ROE)Return on Equity is a useful tool for management as it allows…

Q: How to get answers for a balance sheet using only ratios and interesting expanse of $9 million and…

A: To construct a balance sheet using the provided financial ratios and information, you can follow a…

Q: Provide step by step calculation and give correct answer

A: Step 1: Define Net Profit MarginNet profit margin expresses net profit as a percentage of sales. A…

Q: Please need answer not use ai

Q: The units of Manganese Plus available for sale during the year were as follows: Mar. 1 Inventory…

A: Explanation: As per First In, First Out (FIFO) method, the inventory that has been…

Q: Provide final answer of this accounting question

A: To calculate the annual contributions required to receive a $23,000 annuity for 18 years after…

Q: unc

A: Step 1:It is mentioned in the question one unit requires 0.65 direct labor hour. So, 2 units must…

Q: Hello tutor provide solution for this accounting question

A: Step 1: Define Cash FlowsThe cash flows of a firm can be categorized into three types - operating…

Q: If you give me wrong answer I will give you unhelpful rate

A: Step 1: Define Capital RecoveryCapital recovery is the difference between an asset's acquisition…

Question

100%

Please help me solve the accounting question

If sales increase from $80,000 per year to $120,000 per
year, and if the operating leverage is 5, then net income
should increase by:
A. 167%.
B. 100%.
C. 334%.
D. 250%.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

If sales increase from R80 000 per year to R120 000 per year, and if the operating leverage is 5, then net income should increase by: A. 167%. B. 100%. C. 334%. D. 250%.
If sales increase from P80.000 per year to P140,000 per year, and if the operating leverage factor is 5, then net operating income should increase by:
Assume that a firmʹs earnings are expected to be $11 million next year and that this number is expected to grow by 3.5% a year indefinitely. If the appropriate cost of capital is 11%, what is this firmʹs P/E ratio? 10.1 13.3 2.3 14.5
2. An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million, interest costs of $2 million, and a 30 percent average tax rate. a) Compute its DOL, DFL, and DCL. b) What will be the expected level of EBIT and net income if next year's sales rise 10 percent? c) What will be the expected level of EBIT and net income if next year's sales fall 20 percent?
An enterprise with a profit before interest and tax of 150,000, a compound leverage level of 3 and a financial leverage level of 1.5; What will be the profit before interest and tax if their sales increase by 8% next year?
Assuming a cost of capital of 5% and that $60,000 is the correct profit estimate each year for the next 10 years, what is the IRR if NPV=463,304 a. 32.0% b. 8.1% c. 21.0% d. 2.8%
on the pro forma income statement sales are expected to increase by 23%. If the net margin is expected to increase by 18% and net profit last year was 100 million, what is the net profit projected to be? A) 118 million. B)123 million. C )158 million D) 141 million
Last year Rocco Corporation's sales were $700 million. If sales grow at 6.0% per year, how large (in millions) will they be 8 years later? a. $1,148.35 million b. $1,036.00 million c. $1,115.69 million d. $742.00 million e. $1,052.54 million
Last year sales were $300,000, net operating income was $75,000, and averageoperating assets were $500,000. If sales next year remain the same as last year andexpenses and average operating assets are reduced by 5%, what will be the return oninvestment next year?a. 12.2%b. 18.2%c. 20.2%d. 25.2%
If the net profit of the firm is OMR 280000 and the capital employed is OMR 1400000, then the return on capital employed will be 20%. During inflation with net profit calculated with replacement cost is OMR 150000 and the capital employed is OMR 2000000. Then the return on capital employed will be: a) 14% b) 6.82% c) 7.5% d) 9%
We are predicting for the end of this fiscal year: Skunk Products' EBIT is $1000, its tax rate is 35%, depreciation is $100, capital expenditures are $200, accounts receivable increase by $100, and accounts payable decrease by $100. What is the free cash flow to the firm? The FCFF will grow at 3%, WACC is 10%. What is the value of the company's assets? FCFF1 = $
Last year Dania Corporation's sales were $525 million. If sales grow at 11.3% per year, how large (in millions) will they be 6 years later? O a. $880.95 million Ob. $998.00 million Oc. $584.33 million Od. $896.68 million Oe. $1,078.00 million