Question 3 The information of Chocolate Berhad is described as follows: Sales Variable costs Total contribution margin Fixed costs EBIT Interest expense Earnings before taxes Taxes (30%) Net income RM600,000 200,000 400,000 150,000 250,000 50,000 200,000 60,000 RM140,000 Required: a) What is Chocolate Berhad's BEP(RM)? b) Determine Chocolate Berhad's operating leverage at this level of output. c) Calculate the degree of financial leverage at this level of output for Chocolate Berhad d) What is the combined leverage for Chocolate Berhad? e) If sales increase by 10%, what will be Chocolate Berhad's EPS if the firm has 50,000 shares outstanding?
Question 3 The information of Chocolate Berhad is described as follows: Sales Variable costs Total contribution margin Fixed costs EBIT Interest expense Earnings before taxes Taxes (30%) Net income RM600,000 200,000 400,000 150,000 250,000 50,000 200,000 60,000 RM140,000 Required: a) What is Chocolate Berhad's BEP(RM)? b) Determine Chocolate Berhad's operating leverage at this level of output. c) Calculate the degree of financial leverage at this level of output for Chocolate Berhad d) What is the combined leverage for Chocolate Berhad? e) If sales increase by 10%, what will be Chocolate Berhad's EPS if the firm has 50,000 shares outstanding?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Question 3
The information of Chocolate Berhad is described as follows:
Sales
Variable costs
Total contribution margin
Fixed costs
EBIT
Interest expense
Earnings before taxes
Taxes (30%)
Net income
RM600,000
200,000
400,000
150,000
250,000
50,000
200,000
60,000
RM140,000
Required:
a) What is Chocolate Berhad's BEP(RM)?
b) Determine Chocolate Berhad's operating leverage at this level of output.
c) Calculate the degree of financial leverage at this level of output for Chocolate Berhad
d) What is the combined leverage for Chocolate Berhad?
e) If sales increase by 10%, what will be Chocolate Berhad's EPS if the firm has 50,000
shares outstanding?
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