The Funky Ties Company sells novelty neckties for men. They have variable costs per tie of $5.00 and fixed costs of $26,000 per year. Funky sells the ties for $20 each and sells 3,000 ties per year. Answer the following questions: Calculate Funky’s breakeven point in unit sales. Calculate the degree of operating leverage, If Funky has financed partially with debt and has annual interest cost of $1,000, what is its degree of financial leverage? Calculate the degree of total leverage,
The Funky Ties Company sells novelty neckties for men. They have variable costs per tie of $5.00 and fixed costs of $26,000 per year. Funky sells the ties for $20 each and sells 3,000 ties per year. Answer the following questions: Calculate Funky’s breakeven point in unit sales. Calculate the degree of operating leverage, If Funky has financed partially with debt and has annual interest cost of $1,000, what is its degree of financial leverage? Calculate the degree of total leverage,
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
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The Funky Ties Company sells novelty neckties for men. They have variable costs per tie of $5.00 and fixed costs of $26,000 per year. Funky sells the ties for $20 each and sells 3,000 ties per year. Answer the following questions:
- Calculate Funky’s breakeven point in unit sales.
- Calculate the degree of operating leverage,
- If Funky has financed partially with debt and has annual interest cost of $1,000, what is its degree of financial leverage?
- Calculate the degree of total leverage,
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