You are to receive an annuity of $1,000 per year for 10 years. You will receive the first payment two years from today. At a dis
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Answer:
BEP units: 15,000 60-pounds bags
(B)
14,000 generates 6,000 loss
35,000 generates 120,000 net
(C) operating leverage: 2
(D) financial leverage: 1.63
(E) combined leverage: 3,26
Explanation:
60 pounds sales price = $ 15
60 pound cost: 60 x 0.15 = $ 9
Contribution Margin 6
Fixed Cost 90,000
BEP units: 15,000
(B) profit at given level:
sales x margin - fixed cost = net profit
14,000 x 6 - 90,000 = (6,000)
35,000 x 6 - 90,000 = 120,000
(C) operating leverage: change in EBIT / change in sales
income at 21,000 x 6 - 90,000 = 36,000
EBIT change:
120,000/36,000 = 3 + 1/3
Slaes change:
35,000/21,000 = 1 + 2/3
operating leverage:
(3 + 1/3) / (1 + 2/3) = 2
(d) financial leverage
<u>change in net income: </u>
(120,000 - 17,000) / (36,000 - 17,000)
103,000 / 19,000 = 103/19
<u>change in EBIT</u> 3 + 1/3 (already calculate
(103/19) / (3+1/3) = 1.626315789
(E) combined
2 x 1.626315789 = 3,252631578
The calculation used is mentioned as
.
What is Annual Interest Amount?
- An interest rate is written as an annual percentage rate. It factors in variables like monthly payments to determine what proportion of something like the principal you'll be paying yearly. APR is another term for the yearly rate of interest payable on investments that does not take into account the annual compounding of interest.
- What you still owe just on mortgage principal is known as the loan balance. The loan balance is calculated as the difference here between initial mortgage balance and the sum of your principal payments. It's crucial to be aware of your loan's balance.
- An interest rate indicates how expensive borrowing is or how lucrative saving is. Therefore, if you are a borrower, the interest rate refers to the amount you pay for borrowing money and is expressed as a percentage of the overall loan amount.
The calculation used is illustrated as :
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