You estimate that your cattle farm will generate $0.30 million of profit on sales of $6 million under normal economic conditions and that the degree of operating leverage is 4. A. What will profits be if sales turn out to be $4.5 million? B. What if they are $7.5 million?
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- ou estimate that your cattle farm will generate $1 million of profits on sales of $5.7 million under normal economic conditions and that the degree of operating leverage is 8.a. What will profits be if sales turn out to be $5.0 million? (Negative amount should be indicated by a minus sign. Round your answer to 1 decimal place.) b. What if they are $6.4 million? (Round your answer to 1 decimal place.)You estimate that your cattle farm will generate $0.20 million of profits on sales of $4 million under normal economic conditions and that the degree of operating leverage is 5. a. What will profits be if sales turn out to be $3.2 million? b. What will profits be if sales turn out to be $4.8 million? (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.)You estimate that your sheep farm will generate 1.5 million of profits on sales of 4.4 million under normal economic conditions, and that the degree of operating leverage is 6.3. What will sales be if profits turn out to be 1.9 million? Enter your answer in millions, rounded to two decimal places. Number million
- A project currently generates sales of $17 million, variable costs equal 40% of sales, and fixed costs are $3.4 million. The firm’s tax rate is 30%. Assume all sales and expenses are cash items. a. What are the effects on cash flow, if sales increase from $17 million to $18.7 million? (Input the amount as positive value. Enter your answer in dollars not in millions.) Req cash flow by b. What are the effects on cash flow, if variable costs increase to 45% of sales? (Input the amount as positive value. Enter your answer in dollars not in millions.) Req cash flow bycompute for the following items: g. If breakeven sales in units will increase by 10,000 units, how much will be the increase/decrease in profits? h. If breakeven sales in units will decrease by 4,000 units, how much will be the increase/decrease in profits? i. If the firm wants to increase its current profits by P 60,000. How much sales revenue does it have to make?If NUBD Company achieves its projections, what will be its degree of operating leverage?
- What is the firm's degree of leverage?Your business plan for your proposed start-up firm envisions first-year revenues of $120,000, fixed costs of $30,000, and variable costs equal to one-third of revenue.a. What are expected profits based on these expectations?b. What is the degree of operating leverage based on the estimate of fixed costs and expected profits?c. If sales are 10% below expectation, what will be the decrease in profits?d. Show that the percentage decrease in profits equals DOL times the 10% drop in sales.e. Based on the DOL, what is the largest percentage shortfall in sales relative to original expectations that the firm can sustain before profits turn negative?f. What are break-even sales at this point?g. Confirm that your answer to (f) is correct by calculating profits at the break-even level of sales.Suppose that land is specific to corn, capital is specific to automobiles, labor is mobile between sectors, and payments are as follows: Automobiles: Sales revenue = 200; Payments to labor = 100; Payments to capital = 100 Corn: Sales revenue = 200; Payments to labor = 40; Payments to land = 160 Suppose price of corn increases by 20%, the price of automobiles increases by 10%, and the wage increases by 15%. Calculate the Nominal Percentage change on Rental of Land and put your answer in the box below. (Keep your answer in percentage with 2 decimals. For example, If you got 15.26% , fill in 15.26 in the box below. Do NOT use 0.1526. )
- You are preparing to produce some goods for sale. You will sell them in one year and you will incur costs of $79,000 immediately. If your cost of capital is 7.2%, what is the minimum dollar amount you need to sell the goods for in order for this to be a non-negative NPV? The minimum dollar amount is $ (Round to the nearest dollar) COOA project currently generates sales of $14 million, variable costs equal 50% of sales, and fixed costs are $28 million. The firm's tax rate is 40%. Assume all sales and expenses are cash items. a. What are the effects on cash flow, if sales increase from $14 million to $15.4 million? (Input the amount as positive value. Enter your answer In dollars not In mllons.) Cash flow increases by s 420,000 b. What are the effects on cash flow, if variable costs increase to 60% of sales? (Input the amount as positive value. Enter your answer In dollars not In mlllons.)You are preparing to produce some goods for sale You will sel them in one year and you will incur costs of $74,000 immediately. If your cost of capital is 7 3%, what is the minimum dollar amount you need to sell the goods for in order for this to be a non-negative NPV? el