Bendel Inc. has an operating leverage of 4.8. If the company's sales increase by 13%, its net operating income should increase by about: 62.4%.
<h3>What does it mean if operating income increases?</h3>
- An organization's management is creating more revenue while managing expenses, production costs, and overhead, which is why a company generating an increasing amount of operating income is seen favorably.
- Better managerial controls, more effective resource usage, better pricing, and more successful marketing can all increase operating profit. The operational margin can be defined as the ratio of a company's profits from its main business to its total revenues.
- It could be reasonable to say that the only good operating margin is one that is positive and increasing over time because higher operating margins are generally preferable to lower operating margins. One of the most crucial accounting measures of operational efficiency is operating margin, which is universally accepted.
Bendel Inc. has an operating leverage of 4.8. If the company's sales increase by 13%, its net operating income should increase by about:
Degree of operating leverage = % Change in operating income/ % Change in Sales
4.8 = % Change in operating income/ 13
% Change in operating income = 62.4%
Bendel Inc. has an operating leverage of 4.8. If the company's sales increase by 13%, its net operating income should increase by about: 62.4%.
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Answer:
A
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-150,000
Cash flow each year from year 1 to 5 = $43,690
IRR = 14%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Answer:
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Answer and Explanation:
The computation is shown below;
1. Reorder point is
= Daily demand × lead ime
= 20 × 3 days
= 60 pounds
2. The length of the order cycle is
= Order quantity ÷ demand rate
= 80 ÷ 20 pounds
= 4 days
3. The average inventory level is
= Order quantity ÷ 2
= 80 ÷ 2
= 40 pounds
4. The total daily cost is
the cost of the pepperoni = daily demand × cost per pound
= 20 × 3 pound
= 60
Daily ordering cost is
= daily demand ÷ ordering quantity × ordering cost
= 20 ÷ 80 × $10
= $2.50
And, the daily holding cost is
= ordering cost ÷ 2 × holding cost
= 80 ÷ 2 × 0.04
= $1.60
Now the total daily cost is
= $60 + $2.50 + $1.60
= $64.10
5. The economic order quantity is
= (√2 × annual demand × ordering cost ÷ carrying cost)
= √2 × 20 × 10 ÷ 0.04
= √10,000
= 100
