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Kruka [31]
4 years ago
13

The degree of pretax cash flow operating leverage at Rackit Corporation is 2.7 when it sells 100,000 units of its new tennis rac

ket and its EBITDA is $95,000. Ignoring the effects of taxes, what are the fixed costs for Rackit Corporation?
Business
1 answer:
coldgirl [10]4 years ago
4 0

Answer:

the fixed costs for Rackit Corporation is $161,500.

Explanation:

Cash Flow DOL = 1 + Fixed Cost / EBITDA

2.7 = 1 + Fixed Cost / 95,000

1.7 = Fixed Cost / 95,000

Fixed Cost = $161,500

Therefore, the fixed costs for Rackit Corporation is $161,500.

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Calculation to determine what the amount of ending inventory appearing on the balance sheet will be:

First step is to determine the units in ending inventory

Units in ending inventory=500 units + 600 units – 800 units sold

Units in ending inventory= 300

Now let determine the Ending inventory

Ending inventory=300 units x $4.00

Ending inventory = $1,200

Therefore the amount of ending inventory appearing on the balance sheet will be:$1,200

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There may be a great deal of interaction between a service provider and a consumer in which they co-create value together. In such situations, the customer perceives a high degree of Blank services between the service provider and the company he or she represents.

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