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Capital structure 28. Which of the following is a key determinant of financial leverage? Level of...
27. Which of the following is a key determinant of operating leverage? Level of debt Physical...
27. Which of the following is a key determinant of operating leverage? Level of debt Physical location of production facilities. Cost of debt. Technology Capital structure, 28. Which of the following is a key determinant of financial leverage? Level of debt. Technology Labor costs. Amount of fixed assets used by the firm. Variable cost of goods sold. 29. Which of the following is (are) typically part of the cash budget? Payments lag. Payment for plant construction Cumulative cash All of...
نه نو 29. Which of the following is (are) typically part of the cash budget? Payments...
نه نو 29. Which of the following is (are) typically part of the cash budget? Payments lag. Payment for plant construction. Cumulative cash. All of the above. Only answers a and c above. 30. The financial breakeven point for a firm is defined as the level of sales; EBIT sales, gross profit. EPS; sales. gross profit; EBIT. EBIT; EPS. that pro
26. The projected balance sheet forecasting method produces accurate results unless which of the following condition(s)...
26. The projected balance sheet forecasting method produces accurate results unless which of the following condition(s) is (are) present? Fixed assets are "lumpy." Strong economies of scale are present. c. Excess capacity exists because of a temporary recession. d. Answers a, b, and call make the projected balance sheet method inaccurate. Answers a and c make the projected balance sheet method inaccurate, but, as the text explain assumption of increasing economies of scale is built into the projected balance sheet...
elucescurate results unless which of the following 0. The projected balance sheet forecasting method condition(s) is...
elucescurate results unless which of the following 0. The projected balance sheet forecasting method condition(s) is (are) present? Fixed assets are "lumpy." Strong economies of scale are present. Excess capacity exists because of a temporary recession. Answers a, b, and call make the projected balance sheet method inaccurate. Answers a ande make the projected balance sheet method inaccurate, but, as the text explains, th assumption of increasing economies of scale is built into the projected balance sheet method. 27. Which...
ich of the following 25. Which of the following would be classified as a use of cash? An increase in accounts payab...
ich of the following 25. Which of the following would be classified as a use of cash? An increase in accounts payable. A decrease in marketable securities A decrease in accounts receivable. An increase in retained earnings An increase in inventories. 20. The projected balance sheet fonecasting method produces accurate results unless which of the follow scale are pres temporary recessheet method inaccurate as the condition(s) is (are) present? Fixed assets are "lumpy." Strong economies of scale are present. Excess...
Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $250,000...
Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $250,000 of 17% (annual interest) debt and 3,000 shares of common stock. The firm pays taxes at the rate of 22%. a. Using EBIT values of $80,000 and $120,000, determine the associated earnings per share (EPS) b. Using $80,000 of EBIT as a base, calculate the degree of financial leverage (DFL) c. Rework parts a and b assuming that the firm has $105,000 of 17%...
Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $240,000...
Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $240,000 of 15% (annual interest) debt and 2,000 shares of common stock. The firm pays taxes at the rate of 40% a. Using EBIT values of $83,000 and 5117,000. determine the associated earnings per share (EPS). b. Using 583.000 of EBIT as a base, calculate the degree of financial leverage (DFL) c. Rework parts a and bassuming that the firm has 599,000 of 15% (annual...
Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $300,000...
Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $300,000 of 17% (annual interest) debt and 2,000 shares of common stock. The firm pays taxes at the rate of 30%. a. Using EBIT values of $84,000 and $120,000, determine the associated earnings per share (EPS). b. Using $84,000 of EBIT as a base, calculate the degree of financial leverage (DFL). c. Rework parts a and b assuming that the firm has $97,000 of 17%...
The financial breakeven point for structure A is ? The financial breakeven point for structure B...
The financial breakeven point for structure A is
?
The financial breakeven point for structure B is
?
(Round to the nearest dollar.)
EBIT—EPS and capital structure Data-Check is considering two capital structures. The key information is shown in the following table. Assume a 21% tax rate. Source of capital Long-term debt Common stock Structure A $90,000 at 15.6% coupon rate 4,500 shares Structure B $180,000 at 16.6% coupon rate 2,250 shares a. Calculate two EBIT-EPS coordinates for each of...
Which of the following is true about the concept of leverage? O A. at the breakeven point, operating leverage is equal...
Which of the following is true about the concept of leverage? O A. at the breakeven point, operating leverage is equal to zero. O B. combined leverage measures the impact of operating and financial leverage on EBIT. O C. financial leverage measures the impact of fixed costs on earnings. OD. none of the above Reset Selection
27. Which of the following is a key determinant of operating leverage? Level of debt Physical location of production facilities. Cost of debt. Technology Capital structure, 28. Which of the following is a key determinant of financial leverage? Level of debt. Technology Labor costs. Amount of fixed assets used by the firm. Variable cost of goods sold. 29. Which of the following is (are) typically part of the cash budget? Payments lag. Payment for plant construction Cumulative cash All of...
نه نو 29. Which of the following is (are) typically part of the cash budget? Payments lag. Payment for plant construction. Cumulative cash. All of the above. Only answers a and c above. 30. The financial breakeven point for a firm is defined as the level of sales; EBIT sales, gross profit. EPS; sales. gross profit; EBIT. EBIT; EPS. that pro
26. The projected balance sheet forecasting method produces accurate results unless which of the following condition(s) is (are) present? Fixed assets are "lumpy." Strong economies of scale are present. c. Excess capacity exists because of a temporary recession. d. Answers a, b, and call make the projected balance sheet method inaccurate. Answers a and c make the projected balance sheet method inaccurate, but, as the text explain assumption of increasing economies of scale is built into the projected balance sheet...
elucescurate results unless which of the following 0. The projected balance sheet forecasting method condition(s) is (are) present? Fixed assets are "lumpy." Strong economies of scale are present. Excess capacity exists because of a temporary recession. Answers a, b, and call make the projected balance sheet method inaccurate. Answers a ande make the projected balance sheet method inaccurate, but, as the text explains, th assumption of increasing economies of scale is built into the projected balance sheet method. 27. Which...
ich of the following 25. Which of the following would be classified as a use of cash? An increase in accounts payable. A decrease in marketable securities A decrease in accounts receivable. An increase in retained earnings An increase in inventories. 20. The projected balance sheet fonecasting method produces accurate results unless which of the follow scale are pres temporary recessheet method inaccurate as the condition(s) is (are) present? Fixed assets are "lumpy." Strong economies of scale are present. Excess...
Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $250,000 of 17% (annual interest) debt and 3,000 shares of common stock. The firm pays taxes at the rate of 22%. a. Using EBIT values of $80,000 and $120,000, determine the associated earnings per share (EPS) b. Using $80,000 of EBIT as a base, calculate the degree of financial leverage (DFL) c. Rework parts a and b assuming that the firm has $105,000 of 17%...
Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $240,000 of 15% (annual interest) debt and 2,000 shares of common stock. The firm pays taxes at the rate of 40% a. Using EBIT values of $83,000 and 5117,000. determine the associated earnings per share (EPS). b. Using 583.000 of EBIT as a base, calculate the degree of financial leverage (DFL) c. Rework parts a and bassuming that the firm has 599,000 of 15% (annual...
Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $300,000 of 17% (annual interest) debt and 2,000 shares of common stock. The firm pays taxes at the rate of 30%. a. Using EBIT values of $84,000 and $120,000, determine the associated earnings per share (EPS). b. Using $84,000 of EBIT as a base, calculate the degree of financial leverage (DFL). c. Rework parts a and b assuming that the firm has $97,000 of 17%...
The financial breakeven point for structure A is
?
The financial breakeven point for structure B is
?
(Round to the nearest dollar.)
EBIT—EPS and capital structure Data-Check is considering two capital structures. The key information is shown in the following table. Assume a 21% tax rate. Source of capital Long-term debt Common stock Structure A $90,000 at 15.6% coupon rate 4,500 shares Structure B $180,000 at 16.6% coupon rate 2,250 shares a. Calculate two EBIT-EPS coordinates for each of...
Which of the following is true about the concept of leverage? O A. at the breakeven point, operating leverage is equal to zero. O B. combined leverage measures the impact of operating and financial leverage on EBIT. O C. financial leverage measures the impact of fixed costs on earnings. OD. none of the above Reset Selection
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