Tiger Corp expects to sell 15,000 units of product. The average price per unit is $12 and variable cost per unit is $5. Their fixed costs total $20,000 and they have interest charges of $40,000. Bear Corp expects to sell 15,000 units of product. The average price per unit is $12 and variable cost per unit is $5. Their fixed costs total $20,000 and they have interest charges of $15,000. Which company has greater financial risk?
Tiger Corp expects to sell 15,000 units of product. The average price per unit is $12 and variable cost per unit is $5. Their fixed costs total $20,000 and they have interest charges of $40,000. Bear Corp expects to sell 15,000 units of product. The average price per unit is $12 and variable cost per unit is $5. Their fixed costs total $20,000 and they have interest charges of $15,000. Which company has greater financial risk?
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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Tiger Corp expects to sell 15,000 units of product. The average price per unit is $12 and variable cost per unit is $5. Their fixed costs total $20,000 and they have interest charges of $40,000. Bear Corp expects to sell 15,000 units of product. The average price per unit is $12 and variable cost per unit is $5. Their fixed costs total $20,000 and they have interest charges of $15,000. Which company has greater financial risk?
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