Degree of Operating Leverage
1 answer:
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Answer: 5,882.5 hours
Explanation:
Cumulative Labor Hours to be planned for = Cumulative factor * Time of first unit
Cumulative Factor = Average learning rate for Number of units.
Learning rate from unit 1 to 2 = Labor hours required for 2nd unit / Labor Units required for 1st unit
= 2,250/2,500
= 0.9
Learning rate from unit 2 to 3 = Labor hours required for 3rd unit / Labor Units required for 2nd unit
= 2,120/2,250
= 0.94
Average learning rate = (0.9 + 0.94) / 2
= 0.9
= 90%
There are 6 units in total including the first units checked and the additional 3 units.
Cumulative factor for 6 units at 90% from the table is 5.101.
Cumulative labor hours = 5.101 * 2,500
= 12,752.5 hours
The time for the Addiotnal 3 units is;
= Cumulative time for all units - time for the first 3 units
= 12,752.5 - 2,500 - 2,250 - 2,120
= 5,882.5 hours
Answer: $36.50
Explanation:
The price she will be willing to be paid according to the Dividend Discount model is calculated by finding the present value of the future dividends and the terminal value.
Dividend year 1 = 1 * (1 + 20%) = $1.20
Dividend year 2 = 1.20 * (1 + 20%) = $1.44
Dividend year 3 = 1.44 * (1 + 15%) = $1.656
Terminal value = Dividend in year 4 / (required return - growth rate)
= (1.656 * (1 + 6%)) / ( 10% - 6%)
= $43.884
= $36.50