1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
MrRa [10]
3 years ago
5

ATech has fixed costs of $7 million and profits of $4 million. Its competitor, ZTech, is roughly the same size and this year ear

ned the same profits, $4 million. But it operates with higher fixed costs of $8 million and lower variable costs. a. What is the degree of operating leverage (DOL) for each company? (Defined here as 1 + Fixed costs/Profit.) (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Business
1 answer:
Triss [41]3 years ago
5 0

Answer: Degree of Operating Leverage

A Tech = 2.75

Z Tech = 3

Explanation:

As defined in question itself,

Degree of Operating Leverage = 1 + \frac{fixed\ cost}{Profit}

As here, it is provided that profit for both the companies are same amounting $4 million.

Although the fixed cost differ by $1 million.

A Tech Degree of operating Leverage = 1 + \frac{7,000,000}{4,000,000} = 2.75

Z Tech Degree of Operating Leverage = 1 + \frac{8,000,000}{4,000,000} = 3

This clearly demonstrates that A Tech will reach its break even faster than the Z Tech as the ratio of fixed cost to variable cost is lower in A tech in comparison to Z Tech.

You might be interested in
When the Wright brothers designed their aircraft, they built a wind tunnel to model the aerodynamics of different wing designs.
kodGreya [7K]

Answer:

Endogenous factors (variables that can be controlled when performing a model test):

  • aircraft speed
  • wing angle

The Wright brothers used the wind tunnel to improve the design of their aircraft's wings.

Exogenous factors (variables that cannot be controlled when performing a model test):

  • wind and rain
  • air pressure

No one can control the climate.

8 0
3 years ago
In his speech on the need to expand the local animal shelter, sheldon quotes the center's director as stating, "if we do not sec
mariarad [96]

Moschino Cross Bear Women Short Sleeves Short Dress Black

Shop <u>www.moschinooutletonlinestore.com</u> 2018 Moschino Outlet Online Store, Buy Moschino Cross Bear Women Short Sleeves Short Dress Black with Big Discount, Fast Delivery and Free Worldwide Shipping...

<u>https://www.moschinooutletonlinestore.com/moschino-cross-bear-women-short-sleeves-short-dress-black.html </u>

4 0
3 years ago
Vessels Corporation's net income for the most recent year was $2,532,000. A total of 200,000 shares of common stock and 200,000
Usimov [2.4K]

Answer:

  • The earnings per share of common stock is closest to

D. $11.41.

Explanation:

To find the Price-Earning Ratio first, it's necessary to deduct from the Net Income the part corresponding to Preferred Stock,

which is , $2,532,000 - (200,000*1,25= $250,000) = $2,282,000

Then we calculate the Earning/Share Ratio : $2,282,000/200,000 = 11,41

Shares of Common stock outstanding    200.000     

Shares of Preferred stock outstanding    200.000*$1,25 = $250.000  

NET INCOME Available    $2,282,000  = $ 2,532,000  - $250,000

6 0
3 years ago
You are opening up a brand new retail strip mall. You presently have more potential retail outlets wanting to locate in your mal
ExtremeBDS [4]

Answer:

A) Profitability index.

Explanation:

Based on the scenario being it can be said that the most appropriate tool to use in this specific situation would be a Profitability index. This is a ratio that weighs the payoff to the investment of a specific project. It is allows individuals to rank projects on the amount of value that they will be getting from them. Thus allowing you to choose the most optimal projects in situations such as this one.

7 0
3 years ago
Knoll, inc. currently sells 15,000 units a month for $50 each, has variable costs of $20 per unit, and fixed costs of $300,000.
Lunna [17]
Cost per unit
(300,000÷15,000)+20=40

Current profit
50×15,000−40×15,000=150,000

Profit change
60×15,000−40×15,000=300,000

units will knoll need to sell for profit to remain the same as before the price change is
(150,000+300,000)÷40=11,250
3 0
3 years ago
Other questions:
  • Ellen contracts to buy six cases of vintage Fertile Valley wine from Grapes &amp; Vines Winery for $1,200. The contract states t
    10·1 answer
  • Financial assets Group of answer choices
    10·1 answer
  • Suppose a bank decides to make a mortgage loan to an individual so that she may purchase a home. The homeowner will pay the bank
    10·1 answer
  • "karla is taking two classes for a total of six credit hours. therefore she should be spending a minimum of ________ hours for r
    7·1 answer
  • Because it is difficult for economists to use experiments to generate data, they generally must a. use whatever data the world g
    12·1 answer
  • On May 1, 2021, Concord Corporation declared and issued a 10% common stock dividend. Prior to this dividend, Concord had 207000
    5·1 answer
  • Which of the following is a generic term that denotes the broad range of possibilities of product​ attributes? A. Offering B. Va
    10·1 answer
  • Nick is considering investing in a two year $10,000 bond paying a coupon rate of 4%. The market interest rate is 5%. Calculate t
    10·1 answer
  • Which are ways that the economy is affected when the unemployment rate goes up? Select all that apply.
    5·2 answers
  • Cost of Goods Sold, Cost of Goods Manufactured Glenville Company has the following information for April: Cost of direct materia
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!