Firmhas less operating (business) risk but more financial risk than firm d. Discuss the principles of leverage that your answers illustrate. (Select all the choices that apply.) A. Two firms with differing operating and financial structures will always be leveraged differently. B. Two firms with differing operating and financial structures may be equally leveraged □ C. Since total leverage is the sum of operating and financial leverage, each firm may structure itself differently and still have the same amount of total risk. D. Since total leverage is the product of operating and financial leverage, each firm may structure itself differently and still have the same amount of total risk.
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Integrative-Leverage and risk Firm R has sales of 97,000 units at $2.03 per unit, variable operating costs of $1.67 per unit, and fixed operating costs of $6,070. nterest is $10,080 per year. Firm W...
Integrative—Leverage and risk Firm R has sales of 101,000 units at $1.97 per unit, variable operating...
Integrative—Leverage and risk Firm R has sales of 101,000 units at $1.97 per unit, variable operating costs of $1.68 per unit, and fixed operating costs of $6,010. Interest is $10,080 per year. Firm W has sales of 101,000 units at $2.59 per unit, variable operating costs of $0.98 per unit, and fixed operating costs of $62,600. Interest is $17,400 per year. Assume that both firms are in the 40% tax bracket. a. Compute the degree of operating, financial, and total...
Integrative-Leverage and risk Firm has sales of 104.000 units at $2.05 per unit, variable operating costs...
Integrative-Leverage and risk Firm has sales of 104.000 units at $2.05 per unit, variable operating costs of $1.71 per unit, and fixed operating costs of $6,000 Interest is $10.080 per year Firm Whas sales of 104 000 units at $2.56 per unit, variable operating costs of $0.98 per unit, and fixed operating costs of $62,800 Interest is $17.900 per year. Assume that both firms are in the 40% tax bracket a. Compute the degree of operating, financial, and total leverage...
Degree of operating leverage—Graphical Levin Corporation has fixed operating costs of 580,000, variable operating costs of...
Degree of operating leverage—Graphical Levin Corporation has fixed operating costs of 580,000, variable operating costs of 96.60 per unit, and a selling price of 59.50 per unit a. Calculate the operating breakeven point in units. b. Compute the degree of operating leverage (DOL) using the following unit sales levels as a base: 27,667, 31.667, 39,667 Use the formula given in the chapter c. Graph the DOL figures that you computed in part (b) (on they axis) against base sales levels...
B Question Help Chico's has sales of 15,600 units at a price of $20.92 per unit....
B Question Help Chico's has sales of 15,600 units at a price of $20.92 per unit. The firm incurs fixed operating costs of $29,500 and variable operating costs of $11.92 per unit. What is Chico's degree of operating leverage (DOL) at a base level of sales of 15,600 units? The degree of operating leverage is . (Round to two decimal places.)
Given the graphs above, calculate the total fixed costs,variable costs per unit, and sales price...
Given the graphs above, calculate the total fixed costs, variable costs per unit, and sales price for Firm A. Firm B's fixed costs are $120,000, its variable costs per unit are $4, and its sales price is $8 per unit. Round your answers to the nearest cent.Fixed costs: $ Variable costs per unit: $ Sales price per unit: $ Which firm has the higher operating leverage at any given level of sales?A or BAt what sales level, in units, do both firms earn...
Firms in Japan often employ both high operating and financial leverage because of the use of...
Firms in Japan often employ both high operating and financial leverage because of the use of modern technology and close borrower-lender relationships. Assume the Mitaka Company has a sales volume of 136,000 units at a price of $26 per unit; variable costs are $6 per unit, and fixed costs are $1,910,000. Interest expense is $411,000. What is the degree of combined leverage for this Japanese firm? (Round your answer to 2 decimal places.) Degree of combined leverage
Firms in Japan often employ both high operating and financial leverage because of the use of...
Firms in Japan often employ both high operating and financial leverage because of the use of modern technology and close borrower lender relationships. Assume the Mitaka Company has a sales volume of 135,000 units at a price of $30 per unit: variable costs are $9 per unit and fixed costs are $1,900,000. Interest expense is $410,000. What is the DCL for this Japanese firm? (Round the final answer to 2 decimal places.) Degree of combined leverage DI)
Cantor Products sells a product for $86. Variable costs per unit are $46, and monthly fixed...
Cantor Products sells a product for $86. Variable costs per unit are $46, and monthly fixed costs are $120,000. a. What is the break-even point in units? Break-Even Point 2,609 units b. What unit sales would be required to earn a target profit of $328,000? Total Required Sales units c. Assume they achieve the level of sales required in part b, what is the degree of operating leverage? (Round your answer to 3 decimal places.) Degree of Operating Leverage d....
A proposed project has fixed costs of $82,000 per year. The operating cash flow at 6,200...
A proposed project has fixed costs of $82,000 per year. The operating cash flow at 6,200 units is $88,400. Ignoring the effect of taxes, what is the degree of operating leverage? (Do not round intermediate calculations. Round your answer to 4 decimal places, e.g., 32.1616.) Degree of operating leverage If units sold rise from 6,200 to 6,700, what will be the new operating cash flow? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) Operating...
19. Operating leverage* A project has fixed costs of $1,000 per year, depreciation charges of $500...
19. Operating leverage* A project has fixed costs of $1,000 per year, depreciation charges of $500 a year, annual revenue of $6,000, and variable costs equal to two-thirds of revenues. a. If sales increase by 10%, what will be the increase in pretax profits? b. What is the degree of operating leverage of this project?
Integrative—Leverage and risk Firm R has sales of 101,000 units at $1.97 per unit, variable operating costs of $1.68 per unit, and fixed operating costs of $6,010. Interest is $10,080 per year. Firm W has sales of 101,000 units at $2.59 per unit, variable operating costs of $0.98 per unit, and fixed operating costs of $62,600. Interest is $17,400 per year. Assume that both firms are in the 40% tax bracket. a. Compute the degree of operating, financial, and total...
Integrative-Leverage and risk Firm has sales of 104.000 units at $2.05 per unit, variable operating costs of $1.71 per unit, and fixed operating costs of $6,000 Interest is $10.080 per year Firm Whas sales of 104 000 units at $2.56 per unit, variable operating costs of $0.98 per unit, and fixed operating costs of $62,800 Interest is $17.900 per year. Assume that both firms are in the 40% tax bracket a. Compute the degree of operating, financial, and total leverage...
Degree of operating leverage—Graphical Levin Corporation has fixed operating costs of 580,000, variable operating costs of 96.60 per unit, and a selling price of 59.50 per unit a. Calculate the operating breakeven point in units. b. Compute the degree of operating leverage (DOL) using the following unit sales levels as a base: 27,667, 31.667, 39,667 Use the formula given in the chapter c. Graph the DOL figures that you computed in part (b) (on they axis) against base sales levels...
B Question Help Chico's has sales of 15,600 units at a price of $20.92 per unit. The firm incurs fixed operating costs of $29,500 and variable operating costs of $11.92 per unit. What is Chico's degree of operating leverage (DOL) at a base level of sales of 15,600 units? The degree of operating leverage is . (Round to two decimal places.)
Firms in Japan often employ both high operating and financial leverage because of the use of modern technology and close borrower-lender relationships. Assume the Mitaka Company has a sales volume of 136,000 units at a price of $26 per unit; variable costs are $6 per unit, and fixed costs are $1,910,000. Interest expense is $411,000. What is the degree of combined leverage for this Japanese firm? (Round your answer to 2 decimal places.) Degree of combined leverage
Firms in Japan often employ both high operating and financial leverage because of the use of modern technology and close borrower lender relationships. Assume the Mitaka Company has a sales volume of 135,000 units at a price of $30 per unit: variable costs are $9 per unit and fixed costs are $1,900,000. Interest expense is $410,000. What is the DCL for this Japanese firm? (Round the final answer to 2 decimal places.) Degree of combined leverage DI)
Cantor Products sells a product for $86. Variable costs per unit are $46, and monthly fixed costs are $120,000. a. What is the break-even point in units? Break-Even Point 2,609 units b. What unit sales would be required to earn a target profit of $328,000? Total Required Sales units c. Assume they achieve the level of sales required in part b, what is the degree of operating leverage? (Round your answer to 3 decimal places.) Degree of Operating Leverage d....
19. Operating leverage* A project has fixed costs of $1,000 per year, depreciation charges of $500 a year, annual revenue of $6,000, and variable costs equal to two-thirds of revenues. a. If sales increase by 10%, what will be the increase in pretax profits? b. What is the degree of operating leverage of this project?
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