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Goshia [24]
3 years ago
15

Praxis Corp. forecasts the following income statement for the next year:

Business
1 answer:
Annette [7]3 years ago
3 0

Answer: a. 1.42

b) 2.74

c) 3.89

Explanation:

a) The Degree of Operating Leverage measures how much operating Income will change by if Sales change.

It is calculated with the formula,

= (Sales - Variable Costs) / (Sales - Variable Costs - fixed costs)

= (960,000 - 532,000) / (960,000 - 532,000 - 127,000)

= 1.42

b) The Degree of financial leverage measures how much Income will change due to a change in operating Income.

The formula is,

=Earnings before Interest and tax / Earnings before Interest and tax - Interest or just Earning before tax

= 301,000/110,000

= 2.74

c. Degree of Total Leverage is a measure of how sensitive the net income of a company is to a change in goods produced and/or sold.

It is calculated by multiplying DOL and DFL.

= 1.42 * 2.74

= 3.89

Should you need any clarification just hit that comment button. Cheers.

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Assume the Expectations Hypothesis regarding the term structure of interest rates is correct.
S_A_V [24]

Answer:

2.5% is the current two years interest rate

Explanation:

If the first year interest rate is 2% and expected coming year interest rate is 3% based on the hypothetical projection which is believed to be correct, then the interests rate for the two years will be the average of the interest of the two years in focus which gives us:

Current IR = IR (yr 1) + IR (yr 2) / no of years

Current IR = 2 + 3 / 2 = 2.5

6 0
3 years ago
Your portfolio is 230 shares of Barden, Inc. The stock currently sells for $93 per share. The company has announced a dividend o
Ipatiy [6.2K]

Answer:

Your stock will be valued in $20,838.

Explanation:

If there are no taxes, it is expected that the value of the stock will lower the amount of the dividend. That means

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In this case, your stock of 230 shares will be valued as

Stock value = Stock share * stock price = 230 shares * $90.6/share

Stock value = $ 20,838

Your stock will be valued in $20,838.

6 0
3 years ago
The short-run aggregate supply curve will decrease if:
finlep [7]

Answer: A. the aggregate price level falls. commodity prices rise.

Explanation: In short-run, the aggregate supply is usually a graph pointing upward and with a sloping curve. The short-run aggregate supply curve usually points upward sloping because it indicates quantity supplied which increases when the price rises. In the short-run, organisations usually have only one fixed factor of production which is capital.

8 0
3 years ago
If you invest $5,000 at the beginning of each month, howmany months will it take for your account to grow to $250,000
mr Goodwill [35]

Answer:

50 Months

Explanation:

If there is no compound interest it would be 50 Months. You would divide 250,000 by 5,000 to get the months.

5 0
2 years ago
You expect KT industries (KTI) will have earnings per share of $4 this year and expect that they will pay out $1.75 of these ear
melisa1 [442]

The value of a share of KTI's stock today is closest to 9.5% , 0.004375 .

Explanation:

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In addition to the spending price, ROI aims to explicitly calculate the make value of a single project.

g = retention rate

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Price = 1.75/(0.10-0.0975) = 0.004375

5 0
3 years ago
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