operating leverage factor
Q: What is optimal capital budget?
A: Budget: The estimation of the income and expenditure of the particular future period and is…
Q: ing control ing relative efficiency short-term, spare capacity de
A: Cost refers to the compiled sum of all the expenses involved while manufacturing a product.
Q: Explain Financial Flexibility
A: Financial flexibility is the capacity of an organization to effectively manage changes in its…
Q: Define yield curve
A: Yield is the percentage of securities at which the return is provided by the company to its…
Q: Explain profit margin
A: Profit margin is one of the benefits proportions that's generally utilized to assess the level to…
Q: Explain return on invested capital (ROIC)
A: Return on invested capital is the return expressed in the form of percentage which a company or an…
Q: An upward-sloping yield curve
A: An upward sloping yield curve: may reflect the confounding of the liquidity premium with interest…
Q: Explain the effect of issuance cost on firm value.
A: There are issues cost associated with debt and equity that has impact on value of firm.
Q: Factors that Affect Yield to Maturity
A: A bond's yield to maturity depends basically on its present value, coupon rate and the time to…
Q: Explain retention growth equation
A: The retention growth equation demonstrates the ways through which the growth is associated to…
Q: Cost behavior Costs Value Chain O Cost drivers
A: Answer: Cost behavior is defined as the changing nature of cost dependent on any units. Costs are of…
Q: Explain the goal of yield management
A: Yield management is a kind of pricing strategy.It is based on the understanding of the behavior of…
Q: 3. Give an example of CVP and Compute BEP, Changes in Net Income, Margin of Safety, and Degree of…
A: The CVP Analysis is the analysis of the cost accounting i.e. the a way to find out how changes in…
Q: An ideal situation would be to keep leverage high and Jeverage low Select one: O a. Operating…
A: High operating leverage indicates that company is making few sales but with high margins. This shows…
Q: Define each of the following terms:b. Operating leverage; financial leverage; break-even point
A: Answer: Operating leverage: This is the degree to which the company employs the fixed costs. The…
Q: What is Market Value Added (MVA)?
A: The market value added is the difference of the current value of the company and the equity capital…
Q: What is the return on investment (ROI)?
A: Introduction: An investment is the acquisition of an asset or object with the intention of earning…
Q: Check all that apply: O Demand variability O Financial leverage O Competition and the abilit O Input…
A: Business risk are those related to the operations of business.
Q: financial
A: Financial leverage refers to money that is borrowed in order to buy assets for the company with the…
Q: contribution margin ratio
A: The contribution margin is the amount left after subtracting the variable costs from the selling…
Q: Internal rate of return
A: Internal rate of return- It is the rate of discount at which the sum of discounted cash inflows…
Q: Interpret the effect on operating leverage as a firm’s scale of operations moves in a favorable…
A: Operating leverage tells how revenue growth is contributing growth in the operating income. Break…
Q: commercial market trade industries market segmentation inelastic demand
A: Market is a place where parties gather to exchange goods and services. Parties involved are known as…
Q: What is net operating margin ?
A: operating profit is the companies earnings after deducting operating expenses. operating profit =…
Q: Define efficiency ratios
A: Efficiency Ratios : These ratios are employed to evaluate the efficiency with which the firm manages…
Q: Trend analysis of net profit margin and leverage ratios help in identtyi
A: There are various types of risk a businessman needs to evaluate before starting up the business. The…
Q: Explain this statement: Using financial leverage has both good and bad effects.
A: financial leverage is the process of borrowing capital to make an investment, with the assurance…
Q: xplain what is meant by maintaining financial flexibility.
A: Companies generally do plan for the cash needs and follow as per the budgets and plans to run the…
Q: Define Working capital turnover
A: Working capital represents the liquidity of a company as it shows the difference between the current…
Q: Explain the risk-profitability tradeoff in working capital management.
A: Working capital management involves ensuring that the company is able to meet its short-term…
Q: Explain the parameters or situations used to determine if the operating and financial leverages are…
A: Operating leverage is based on the cost structure of the company. It is the extent of fixed and…
Q: Explain Yield Enhancement?
A: A "yield enhancement technique" is an investment approach that includes purchasing options at the…
Q: Explain how a yield curve is constructed.
A: Yield curve is referred to as the line, which used to plot yields that are interest rates of the…
Q: What is the return on invested capital (RIC)?
A: Return on investment (ROI): This financial ratio evaluates how efficiently the assets are used in…
Q: Define yield.
A: Yield can be considered as a metric for cash flow for the investor on the amount with which a…
Q: Define “Market Value Added (MVA)” and “Economic Value Added(EVA).”
A: Introduction: Economic value added (EVA) and Market value added (MVA) are computations utilized to…
Q: PRODUCTIVITY RATIO
A: Units expected to be produced in 0.5 minutes 1 Units expected to be produced in 'n' minutes Total…
Q: return on investment
A: First option is wrong because return on investment will decrease if invested capital increases.…
Q: HAT ARE THE TYPES OF LEVERAGE? HOW ARE THEY CALCULATED AND WHAT DO THEY IMPLY?
A: Leverage is the technique of risk evaluation in a business. There are three types of Leverage…
Q: Explain operating leverage and the degree of operating leverage. What does the degree of operating…
A: Operating Leverage: Operational leverage is a cost-accounting metric that determines how much a…
Q: Calculate Times interestearned Return on Financial leverage
A: Ratio analysis: This is the quantitative analysis of financial statements of a business enterprise.…
Q: Operating leverage refers to the extent to which an organization's cost structure is made up of:…
A: Operating leverage is a ratio of how of change in sales effect the change in operating income. It…
Q: Profit maximization
A: Introduction: The term financial management refers to the art of planning, organizing, directing…
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- Company XYZ produces and sells headphones. The company has total fixed costs of $112,000. Each headphone sells for $315 per unit and has variable costs of $225 per unit. Next year XYZ Company wishes to earn an operating income that equals 90% of fixed costs. How many units must be sold to achieve this target income level? (rounded to the nearest number) Select one: O a. 2,364 O b. 1,244 O c. 394 O d. 124 O e. 207K Allen's Ark sells 2,000 canoes per year at a sales price of $470 per unit. Allen's sells in a highly competitive market and uses target pricing. The company has calculated its target full product cost at $740,000 per year. Total variable costs are $250,000 per year and cannot be reduced. Assume all products produced are sold. What are the target fixed costs? OA. $940,000 OB. $200,000 OC. $250,000 OD. $490,000 GEZOSTiktok Company distributes a lightweight lawn chair that sell for P150 per unit. Variable costs are P60 per unit, and fixed costs total P1,800,000 annually. The company estimates that sales will increase by P450,000 during the coming year due to increased demand. Required: By how much should net income increase?
- ABC Company manufactures the product XE-17. The product is sold at a unit price of $70.Variable expenses are $13.50 per unit and fixed expenses are $220,000 per year.Required :a. What should be the product’s CM ratio? b. Calculate the BEP is sales dollars and in units for ABC Company. c. The manager of ABC company estimates that in the coming year, the company’s sales willincrease by $80,000 (from the current sales). How much should the net profit / loss increase/decrease if the fixed costs remain constant? d. The manager of ABC company predicts that by spending an additional $80,000 per year onadvertising and using higher quality raw material (which will in turn increase the raw materialcost per unit by $3), and increasing selling price per unit by 2% (to compensate for theincreased costs), unit sales will increase by two- thirds of the current sales units. Should thecompany go with the manager’s proposed plan? Explain your answer. (Assume that in thecurrent year, the company sold…ABC Company manufactures the product XE-17. The product is sold at a unit price of $70.Variable expenses are $13.50 per unit and fixed expenses are $220,000 per year.Required :a. What should be the product’s CM ratio? b. Calculate the BEP is sales dollars and in units for ABC Company. c. The manager of ABC company estimates that in the coming year, the company’s sales willincrease by $80,000 (from the current sales). How much should the net profit / loss increase/decrease if the fixed costs remain constant? d. The manager of ABC company predicts that by spending an additional $80,000 per year onadvertising and using higher quality raw material (which will in turn increase the raw materialcost per unit by $3), and increasing selling price per unit by 2% (to compensate for theincreased costs), unit sales will increase by two- thirds of the current sales units. Should thecompany go with the manager’s proposed plan? Explain your answer. (Assume that in thecurrent year, the company sold…The Blue Co. will produce 25,000 units of product next year. Variable costs ratio is 70%, while fixed costs will total P85,000. The price of each unit to be sold by the firm to achieve an EBIT of P60,000 is A P19.33 B P17.33 C P33.33 D P3.33
- Company XYZ is producing and selling 2,500. At this level, the selling price per unit is $10, the variable expenses per unit is $5, and fixed expenses are $1,500.How much is the profit? O a. $6,000 O b. $8,500 Oc. $11,00O O d. $13,500 O e. $16,000 Company XYZ is currently operating with a 65% contribution margin. The company is planning an upgrade in its production facilities, which is expected to increase sales by $10,000. However, this upgrade is expected to increase fixed costs of $2,500. What would be the expected change in profit? Increase hv $1000 qu.edu.om/mod/quiz/attempt.php?attempt=1893260&cmid%-891193&page=10#question-2134787-26 F1 F3 F5 F7 F8 F9 F10 @ %23 & * 1 2 3 4 7 V E R T Y G YH K 1. I C{V} B YNIM 24 S * 00 ם אStuart CompanyStuart Company manufactures a single product. Each unit sells for $15. The firm's projected costs are listed below: Variable costs per unit: Production $5 SG&A $1 Fixed costs: Production $40,000 SG&A $60,000 Estimated volume 20,000 units Refer to Stuart Company. What is Stuart's projected degree of operating leverage for the current year? Select one: a. 2.25 b. 1.67 c. 3.75 d. 1.802. A firm has the capacity to produce 1,000,000 units of a product per year. At present, it is able to produce and sell 600,000 units yearly at a total income of P720,000.00. Annual fixed costs are P250,000 and the variable costs per unit is P0.70. a. Give the firm's annual profit or loss for this production. b. Give the number of units that should be sold annually to break even
- Problem II. Omega Enterprises sells two products, Model E100 and F900. Monthly sales and the contribution margin ratios for the two products, follow: Product E100 F900 Total Sales P 700,000 P 300,000 P 1,000,000 Contribution margin ratio 60% 70% The Company’s fixed expenses total P598,500 per month. What is the company’s total contribution margin ratio? What is the company’s total net operating income? The break-even point for the company based on the current sales mix is ______.4 Atlas Company has a monthly target operating income of $20,000. Variable expenses are 60% of sales and monthly fixed expenses are $11,400. What is ?John's operating leverage factor at the targetlevel of operating income 1.75 ) 1.57 () 1.43 ) 2.00 () 1.35 ()Atlas Company has a monthly target operating income of $20,000. Variable expenses are 60% of sales and monthly fixed expenses are $11,400. What is ?John's operating leverage factor at the target level of operating income 1.75 ) 1.57 ) 1.43 O 2.00 1.35