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Law Incorporation [45]
4 years ago
7

he degree of leverage concept is designed to show how changes in sales affect earnings before interest and taxes (EBIT) and earn

ings per share (EPS). If a 10 percent increase in sales causes EPS to increase from $1.00 to $1.50 and if the firm uses no debt, then what is its degree of operating leverage?
Business
1 answer:
Greeley [361]4 years ago
3 0

Answer: 5

Explanation:

The measure used to evaluate a change in company 's operating income as a result of relative change in sales is called degree of operating leverage of the company. The operating leverage has two components that is fixed cost and variable cost.

.

Operating income of a company is denoted as EBIT, that is, earnings before interest and tax.

.

FORMULA = \frac{percentage\ change\ in\ EBIT}{percentage\ change\ in\ sales}

                = \frac{50}{10} = 5

note :-

percentage change in EBIT = \frac{1.5-1}{1}= 50%

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Metropolitan Water Utility is planning to upgrade its SCADA system for controlling well pumps,booster pumps, and disinfection eq
Licemer1 [7]

Answer:

net wortht  -143,280.85

equivalent annual cost $ 24,932.98

Explanation:

We sovle for the present value of each annuity:

<em><u>The first three years:</u></em>

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 31,000.00

time 3

rate 0.08

31000 \times \frac{1-(1+0.08)^{-3} }{0.08} = PV\\

PV $79,890.0066

<em><u>Then the second phase annuity:</u></em>

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 20,000.00

time 5

rate 0.08

20000 \times \frac{1-(1+0.08)^{-5} }{0.08} = PV\\

PV $79,854.2007

NOw, we discount this as it is three years into the future

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity  $79,854.2007

time  3.00

rate  0.08000

\frac{79854.2007415617}{(1 + 0.08)^{3} } = PV  

PV   63,390.8391

Total net worth:

79,890.0066    -   63,390.8391    =   -143,280.85

The EAC will be the annuity which makes the Present work

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV 143,280.85

rate 0.08

time 8

143280.85 \div \frac{1-(1+0.08)^{-8} }{0.08} = C\\

C  $ 24,932.983

7 0
3 years ago
When using net present value to compare projects, the total cost approach?
amid [387]

When using net present value to compare projects, the total cost approach  Is the most flexible method available to compare projects. Includes all cash inflows and outflows under each alternative.

Total fee technique, the whole cost technique normally consists of subtracting the bid fee from the total cost of performance and including profit in the resulting amount. This method is closely disfavored with the aid of the forums and courts.

Producers usually define supply chain charges using the full value of ownership. the total cost of ownership is defined as the aggregate of the acquisition or acquisition fee of a great or carrier. To this, they add the extra expenses incurred earlier than or after the services or products are delivered.

The whole price formulation is used to combine the variable and fixed costs of providing goods to determine a complete. The system is total fee = (common constant value x common variable value) x quantity of gadgets produced. To use this component, you need to recognize the figures for your constant and variable fees.

Learn more about the total cost  here brainly.com/question/25109150

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3 0
1 year ago
The portfolio management technique that uses a market index as a performance benchmark that the asset manager must exceed is cal
nadya68 [22]

The answer is Active asset management

The portfolio management technique that uses a market index as a performance benchmark that the asset manager must exceed is called Active asset management.

What is active asset management?

  • Active asset management includes analyzing advertise patterns, financial and political information, and company particular news.
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6 0
2 years ago
Jack works hard on his projects as his manager promises him a salary increase on successful completion of the project. jack's ha
DIA [1.3K]

Extrinsic motivation

 Extrinsic motivation is defined as behavior that is motivated by external factors outside an individual such as rewards, fame, attention or praise. Therefore, if Jack’s motivation for successfully completing a project is a salary raise and more, he is externally motivated. He is motivated to do well largely by the external factor, money, rather than intrinsic factors such as a sense of achievement and pride.

7 0
4 years ago
Is a salary increase, usually permanent, given because of an individual's past performance?
horsena [70]
I think the answer is "given immediately<span>, "on the spot," as soon as a desired behavior is seen. </span>pay<span> employees based on some specific measure of their </span>performance<span>."</span>
7 0
3 years ago
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