A firm’s sales decline while it is locked into a number of fixed cost leases for equipment. What is this an example of?
Purchasing power risk
Business risk
Price risk
Financial risk
purchasing power risk-inflation,Raises the Cost of Borrowing.Lowers the Cost of Borrowing.
Business risk -Increase in production costs ,Cash flow problems
Price risk-decreasing product price,increasing imput price
Financial risk-budget risk,taxation risk,
A firm’s sales decline while it is locked into a number of fixed cost leases for...
Company had P15M in sales, while total fixed costs were held to P6M. The firm’s total assets averaged P20M and the debt to equity ratio was calculated at 0.60. If the firm’s EBIT is P3M, the interest on all debt is 9%, and the tax rate is 40%, what is the return on equity?
A large number of firms are involved in leases. These leases may include renting of office or warehouse space (typically in the form of operating leases) or the leasing of building and/or equipment, which may consist of capital leases. Our topic on this discussion board is capital leases. Please answer the following questions after reading the assigned chapters. What are the four capitalization criteria and which one is not controversial and difficult to apply in practice? What are two differences...
Slappy Corporation leases its corporate headquarters building. This lease cost is fixed with respect to the company's sales volume. In a recent month in which the sales volume was 20,000 units, the lease cost was $482,000. To the nearest whole cent, what should be the average lease cost per unit at a sales volume of 19,200 units in a month? (Assume that this sales volume is within the relevant range.) sok Multiple Choice $28.52 $25.10 O $24.60 $24.10 O Blore...
Question 1: Sales price variance, sales volume variance, and fixed cost variance Budgeted Actual Price $600 $650 Sales volume in units 50 45 Unit VC $100 $220 Fixed costs $200,000 $220,000 a) Without computations, characterize the following variances as favorable or unfavorable: sales price variance F U sales volume variance F U fixed cost variance F U b) Compute the following variances. Enter favorable variances as a positive number and unfavorable variances as a negative number. Do NOT enter F...
Slappy Corporation leases its corporate headquarters building. This lease cost is fixed with respect to the company's sales volume. In a recent month in which the sales volume was 20,000 units, the lease cost was $482,000. To the nearest whole cent, what should be the average lease cost per unit at a sales volume of 19,200 units in a month? (Assume that this sales volume is within the relevant range.) Multiple Choice 528.52 a 52510 52460 Cobalt Company management has...
Question 20 (1 point) The fixed-asset turnover ratio provides COD The rate of decline in asset lives. The rate of replacement of fixed assets. The amount of sales generated per dollar of fixed assets. The decline in book value of fixed assets compared to capital expenditures. Question 21 (1 point) Maltese is a privately owned company. On September 3. Maltese exchanged 2.000 shares of its private common stock for equipment. There is no readily available estimate of the stock's fair...
Gladstorm Enterprises sells a product for $49 per unit. The variable cost is $31 per unit, while fixed costs are $14,256. Determine the following: Round your answers to the nearest whole number. a. Break-even point in sales units units b. Break-even point in sales units if the selling price increased to $64 per unit units
For the firm described below, what is the firm’s 2010 total cash flow and the firm’s 2010 cash flow to shareholders? Consider the following information regarding ABC Corporation. Sales ($ millions) 2009: 1000 2010:1112 Cost of Goods Sold ($ millions) 2009: 500 2010: 556 Other Expenses ($ millions) 2009: 100 2010: 111 Depreciation ($ millions) 2009: 100 2010: 100 Interest Expense ($ millions) 2009: 50 2010: 55 Total Current Assets ($ millions) 2009: 600 2010: 700 Net Fixed Assets ($...
For the firm described below, what is the firm’s 2010 total cash flow and the firm’s 2010 cash flow to shareholders? Consider the following information regarding ABC Corporation. Sales ($ millions) 2009: 1000 2010:1112 Cost of Goods Sold ($ millions) 2009: 500 2010: 556 Other Expenses ($ millions) 2009: 100 2010: 111 Depreciation ($ millions) 2009: 100 2010: 100 Interest Expense ($ millions) 2009: 50 2010: 55 Total Current Assets ($ millions) 2009: 600 2010: 700 Net Fixed Assets ($...
Nicolas Enterprises sells a product for $55 per unit. The variable cost is $34 per unit, while fixed costs are $37,044. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $62 per unit. a. Break-even point in sales units units b. Break-even point if the selling price were increased to $62 per unit units