Get correct answer general accounting Modern Artifacts can produce keepsakes that will be sold for $40each. Nondepreciation fixed costs are $600 per year, and variablecosts are $30 per unit. The initial investment of $1,800 will bedepreciated straight-line over its useful life of 6 years to a final valueof zero, and the discount rate is 8%.What is the degree of operating leverage of Modern Artifacts whensales are $4,000? (Do not round intermediate calculations. Roundyour answer to 2 decimal places.)

Step 1: Define Financial and Operating LeverageBoth financial and operating leverage increase the…

Answered: Modern Artifacts can produce keepsakes…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 5P

See similar textbooks

Similar questions

Modern Artifacts can produce keepsakes that will be sold for $100 each. Nondepreciation fixed costs are $1,100 per year, and variable costs are $74 per unit. The initial investment of $4,800 will be depreciated straight-line over its useful life of five years to a final value of zero, and the discount rate is 10%. a. What is the degree of operating leverage of Modern Artifacts when sales are $8,500? Note: Round your answer to 1 decimal place. b. What is the degree of operating leverage when sales are $14,500? Note: Round your answer to 1 decimal place. a. Degree of operating leverage b. Degree of operating leverage times times
Modern Artifacts can produce keepsakes that will be sold for $120 each. Nondepreciation fixed costs are $1,800 per year, and variable costs are $70 per unit. The initial investment of $5,400 will be depreciated straight-line over its useful life of 6 years to a final value of zero, and the discount rate is 18%. a. What is the degree of operating leverage of Modern Artifacts when sales are $7,440? b. What is the degree of operating leverage when sales are $12,000?
Modern Artifacts can produce keepsakes that will be sold for $240 each. Nondepreciation fixed costs are $3,600 per year, and variable costs are $140 per unit. The initial investment of $10,800 will be depreciated straight-line over its useful life of 3 years to a final value of zero, and the discount rate is 8%. a. What is the degree of operating leverage of Modern Artifacts when sales are $17,760? (Do not round Intermedlate calculatilons. Round your answer to 2 decimal places.) Degree of operating leverage b. What is the degree of operating leverage when sales are $35.280? (Do not round Intermedlate calculations. Round your answer to 2 decimal places.) Degree of operating leverage c. Why is operating leverage different at these two levels of sales? Degree of operating leverage is when profits are
Modern Artifacts can produce keepsakes that will be sold for $270 each. Nondepreciation fixed costs are $3,200 per year, and variable costs are $190 per unit. The initial investment of $9,600 will be depreciated straight-line over its useful life of 8 years to a final value of zero, and the discount rate is 16%. a. What is the degree of operating leverage of Modern Artifacts when sales are $16,740? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b.What is the degree of operating leverage when sales are $28,890? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Why is operating leverage different at these two levels of sales?
Modern Artifacts can produce keepsakes that will be sold for $270 each. Nondepreciation fixed costs are $3,200 per year, and variable costs are $190 per unit. The initial investment of $9,600 will be depreciated straight-line over its useful life of 8 years to a final value of zero, and the discount rate is 16%. a.What is the degree of operating leverage of Modern Artifacts when sales are $16,740? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the degree of operating leverage when sales are $28,890? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Why is operating leverage different at these two levels of sales? Degree of operating leverage is _____ when profits are _____.
Modern Artifacts can produce keepsakes that will be sold for $130 each. Nondepreciation fixed costs are $2,000 per year, and variable costs are $80 per unit. The initial investment of $6,000 will be depreciated straight-line over its useful life of 3 years to a final value of zero, and the discount rate is 14%. a. What is the degree of operating leverage of Modern Artifacts when sales are $11,050? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the degree of operating leverage when sales are $17,810? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Why is operating leverage different at these two levels of sales?
Modern Artifacts can produce keepsakes that will be sold for $280 each. Nondepreciation fixed costs are $5, 000 per year, and variable costs are $260 per unit. The initial investment of $13,000 will be depreciated straight-line over its useful life of five years to a final value of zero, and the discount rate is 10%. What is the accounting break-even level of sales if the firm pays no taxes? What is the NPV break-even level of sales if the firm pays no taxes? Note: Do not round intermediate calculations. Round your final answer to the nearest whole number. What is the accounting break-even level of sales if the firm's tax rate is 20%? What is the NPV break-even level of sales if the firm's tax rate is 20%? Note: Do not round intermediate calculations. Round your final answer to the nearest whole number. What is the degree of operating leverage for the firm for the NPV break-even points when the tax rate is 0% and when the tax rate is 20%? Note: Round intermediate calculation to the…
Modern Artifacts can produce keepsakes that will be sold for $60 each. Nondepreciation fixed costs are $3,000 per year, and variable costs are $30 per unit. The initial investment of $3,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 10%. a. What is the accounting break-even level of sales if the firm pays no taxes? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Accounting break-even level of sales: 120 units b. What is the NPV break-even level of sales if the firm pays no taxes? (Do not round intermediate calculations. Round your answer to the nearest whole number.) NPV break-even level of sales: 126 units c. What is the accounting break-even level of sales if the firm’s tax rate is 30%? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Accounting break-even level of sales: 120 units d. What is the NPV break-even level…
Modern Artifacts can produce keepsakes that will be sold for $60 each. Nondepreciation fixed costs are $1,400 per year, and variable costs are $30 per unit. the initial investment of $5,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 12%. a). What is the accounting break-even level of sales if the firm pays no taxes? b).What is the NPV break even level of sales if the firm pays no sales? c). What is the accounting break even level of sales if the firms tax rate is 20%/ d). What is the NPV break even level of sales if the firms tax rate is 20%?
Modern Artifacts can produce keepsakes that will be sold for $100 each. Nondepreciation fixed costs are $1,300 per year, and variable costs are $70 per unit. The initial investment of $4,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 12%. (For all the requirements, do not round intermediate calculations. Round your answer to the nearest whole number.) a. What is the accounting break-even level of sales if the firm pays no taxes? b. What is the NPV break-even level of sales if the firm pays no taxes?
Modern Artifacts can produce keepsakes that will be sold for $100 each. Nondepreciation fixed costs are $1,300 per year, and variable costs are $70 per unit. The initial investment of $4,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 12%. (For all the requirements, do not round intermediate calculations. Round your answer to the nearest whole number.) b. What is the accounting break-even level of sales if the firm’s tax rate is 30%? a. What is the NPV break-even level of sales if the firm’s tax rate is 30%?
Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $2.900 per year, and variable costs are $30 per unit. The initial investment of $3,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 14%. (For all the requirements, do not round Intermedlate calculations. Round your answer to the nearest whole number.) a. What is the accounting break-even level of sales if the firm pays no taxes? b. What is the NPV break-even level of sales if the firm pays no taxes? c. What is the accounting break-even level of sales if the firm's tax rate is 40%? d. What is the NPV break-even level of sales if the firm's tax rate is 40%?

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Corporate Fin Focused Approach

Finance

ISBN:

9781285660516

Author:

EHRHARDT

Publisher:

Cengage

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS