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3 years ago

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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Answer:

$296,000

Explanation:

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Cash flow from investing activities :

Proceeds from sale of equipment $296000

Net Cash Provided by investing activities $296000

therefore,

The net cash provided by investing activities during 2021 is $296000.

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3 years ago

Unlike manufacturers, ________ buy products from other businesses but do not significantly alter the form of the products they b

LenKa [72]

Answer: Resellers

Explanation:

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3 years ago

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alina1380 [7]

Answer:

For centuries the guideline for business transactions was the Latin term “caveat emptor” (let the buyer beware). This principle suggests that the seller is not responsible for the buyer’s welfare. In other words such principle gives the buyer the sole responsibility for checking the quality and suitability of the goods that he is buying from the seller before making a final purchase.

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2 years ago

A financier plans to invest up to $500,000 in two projects. Project A yields a return of 9% on the investment of x dollars, wher

jonny [76]

Answer:

She should invest $300,000 in Project A, and $200,000 in Project B.

Explanation:

Solution

Since Project B yields a higher return, she should invest as much money as possible in it, which is 40% of the total investment or

or (0.40)($500,000) = $200,000

The remaining $500,000 - $200,000 = $300,000 should be invested in Project A.

Therefore, she should invest $300,000 in Project A, and $200,000 in Project B.

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3 years ago

A video-recording system was purchased 4 years ago at a cost of $37,000. A 5-year recovery period and DDB (Double Declining Bala

AysviL [449]

Answer:

The trade in value is higher than the book value by $ 205

Explanation:

Computation of Book value

In a double declining balance method of depreciation, the rate of depreciation is double the straight line rate and is depreciated on a declining balance.

Cost of Equipment $ 37,000

Estimated useful life ( Recovery Period) 5 years

Straight Line Depreciation rate 20 %

Double declining Method depreciation rate 40 %

Cost $ 37,000

Depreciation for year 1 at 40 % $(14,800)

Depreciable basis for year 2 $ 22,200

Depreciation for year 2 at40 % $ ( 8,880)

Depreciable basis for year 3 $ 13,320

Depreciation for year 3 at 40 % $ (5,328)

Depreciable basis for year 4 $ 7,992

Depreciation for year 4 at 40 % $ 3,197)

Depreciable basis for year 5 $ 4,795

The depreciable basis for year 5 is the net book value after 4 years

The trade value is $ 5,000

The trade in value is higher by $ 205

8 0

3 years ago