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Crazy boy [7]
3 years ago
8

Problem 11-11 Calculating Operating Leverage [LO4] At an output level of 62,000 units, you calculate that the degree of operatin

g leverage is 3.7. The output rises to 67,000 units. What will the percentage change in operating cash flow be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Will the new level of operating leverage be higher or lower?
Business
1 answer:
Mandarinka [93]3 years ago
3 0

Answer:

Percentage change in sales = [(Ending value - Beginning value) / Beginning value] * 100

Percentage change in sales = [($67,000 - $62,000) / $62,000] * 100

Percentage change in sales = 0.080645

Percentage change in sales = 8.0645%

Percentage change in OCF = Percentage change in sales * Degree of operating leverage

Percentage change in OCF = 8.0645% * 3.7

Percentage change in OCF = 29.84%

Will the new level of operating leverage be higher or lower?

As the sales increase, contribution margin will remain constant but operating margin percentage will rise. Therefore, this leads to fall in operating leverage.

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<span>Contractionary fiscal policy that reduces the budget deficit may INCREASE Business investment by REDUCING interest rates
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3 0
3 years ago
Shadee Corp. expects to sell 550 sun visors in May and 380 in June. Each visor sells for $12. Shadee’s beginning and ending fini
djyliett [7]

Answer:

August = $5, 472

September = $5,419

Explanation:

Shadee Corporation

Cash Receipt Budget

For the month of August & September

August September

Sales Volume 460 470

Price per unit 12 12

Total Sales $5,520 $5,640

60% Cash Sales $3,312 $3,384

Credit Sales:

54% collected in the month of sales

$1,192 $1,218

37% collected in the following month

$968 (1) $817

Total budgeted cash receipt

$5,472 $5,419

Note: (1)

37% of July's credit sale will be collected in the month of August. Therefore,

July's total sales = 545 × 12 = $6540

60% of them is cash = $3,924

Remaining is credit = $2,616

37% of credit sales = $2,616 × 37% = $968

7 0
3 years ago
Fairview Community College is a multi-district college with four campuses. Each campus has one president, two vice presidents, f
EastWind [94]

Answer:

The correct answer is b. chain of command

Explanation:

A chain of command is a system of sending information characteristic of organizations with strong, vertical and authoritarian hierarchical structures, such as political-party and military organizations, where orders, rewards and penalties flow from the tip of the pyramid organizational to the base, and where it is expected that only the required information, entrusted activities and tasks flow to the top of it.

7 0
3 years ago
Jonas has been assigned to work with a team at Falk Enterprises, Inc. Jonas has supervised this team in the past, and they have
olga55 [171]

Answer:

There should be defined roles of all the team members and they should know their responsibilities.

Explanation:

Jonas should clearly assign tasks of the project to his team members and each member should be accountable for his task. Jonas should teach his team about the significance of time management and therefore task must be completed before deadlines. Each member of the team must have defined responsibilities and roles.

5 0
3 years ago
In each of the following situations, state whether the bonds will sell at a premium or discount. Required a. Valley issued $300,
IrinaK [193]

Answer:

a. Premium

b. Discount

c. Discount

Explanation:

a. Valley issued $300,000 of bonds with a stated interest rate of 7 percent. At the time of issue, the market rate of interest for similar investments was 6 percent.

Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 7% - 6% = 1% premium

Therefore, Valley's bond will sell at a premium.

b. Spring issued $220,000 of bonds with a stated interest rate of 5 percent. At the time of issue, the market rate of interest for similar investments was 6 percent.

Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 5% - 6% = -1% discount

Therefore, Spring's bond will sell at a discount.

c. River Inc. issued $150,000 of callable bonds with a stated interest rate of 5 percent. The bonds were callable at 102. At the date of issue, the market rate of interest was 6 percent for similar investments.

Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 5% - 6% = -1% discount

Therefore, River Inc.'s bond will sell at a discount.

3 0
3 years ago
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