1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
bearhunter [10]
3 years ago
5

At an output level of 84,000 units, you calculate that the degree of operating leverage is 1.80. Suppose fixed costs are $180,00

0. a. What is the operating cash flow at 78,000 units? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the new degree of operating leverage? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161
Business
1 answer:
Irina-Kira [14]3 years ago
5 0

Answer:

The operating cash flow is $196,071 and the new degree of operating leverage is 1.918

Explanation:

a. The computation of operating cash flow is shown below:

By using the information, first we have to calculate the contribution amount.

We know that the operating leverage equals to

Operating leverage = Contribution ÷ EBIT

And, Contribution  = Fixed cost + EBIT

So,

1.80 =  Fixed cost + EBIT ÷ EBIT

1.80 EBIT - EBIT = Fixed cost

0.80 EBIT = $180,000

So, EBIT = $180,000 ÷ 0.80 = $225,000

And, the contribution = $180,000 + $225,000 = $405,000

Contribution is calculated for 84,000 units but we have to compute for 78,000 units

So, contribution for 78,000 units will be equals to

= $405,000 × 78,000 ÷ 84,000

= $376,071.43

So, the operating cash flow would be

= $376,071.43 - $180,000

= $196,071.43

b. The new degree of operating leverage equals to

=  $376,071.43 ÷ $196,071.43

= 1.918

Hence, the operating cash flow is $196,071 and the new degree of operating leverage is 1.918

You might be interested in
An investor purchases one municipal and one corporate bond that pay rates of return of 8% and 10%, respectively. If the investor
Alinara [238K]

Answer:

rate of return will be 8% and 8%

Explanation:

given data

municipal bond = 8%

corporate bond = 10 %

marginal tax = 20 %

solution

we know that here

Municipal bond no taxes are levied

hence after tax rate of return will be 8%

and

Corporate bond

after tax rate of return will be

rate of return   = 10% × ( 1 - 0.20 )

rate of return   = 8 %

5 0
3 years ago
What type of promotion takes place at trade shows?
ira [324]

B. Personal Selling

A trade show is an event where members of a particular industry or group come together and view displays and booths from various companies with their products and services. The company reps are involved in personal selling to the trade show attendees.

4 0
3 years ago
Read 2 more answers
The law of increasing opportunity costs Multiple Choice applies to land-intensive commodities but not to labor-intensive or capi
yan [13]

Answer:

may limit the extent to which a nation specializes in producing of a particular product.

Explanation:

Opportunity cost also known as the alternative forgone, can be defined as the value, profit or benefits given up by an individual or organization in order to choose or acquire something deemed significant at the time.

Simply stated, it is the cost of not enjoying the benefits, profits or value associated with the alternative forgone or best alternative choice available.

For instance, if you decide to invest resources such as money in a food business (restaurant), your opportunity cost would be the profits you could have earned if you had invested the same amount of resources in a salon business or any other business as the case may be.

The law of increasing opportunity costs can be defined as a principle in business which states that, if an organization or business firm continually raise (increase) its level of production, its opportunity cost also increases (rises).

Consequently, this may limit the extent to which a nation or country in any part of the world specializes in producing of a particular product so as to reduce or lower its opportunity cost.

3 0
3 years ago
In an investment center, the manager has the responsibility for and the authority to make decisions that affect a. both costs an
yaroslaw [1]

Answer:

The answer is B.) Cost, revenue, and assets invested in the center

Explanation:

An investment center is a responsibility center in which the department manager is responsible for costs, revenues and assets for the department.

An investment center is also a business unit in a firm that can utilize capital to contribute directly to a company's profitability.

Examples of departments that make up the cost center are the human resource and marketing departments, units that falls under a profit center include the manufacturing and sales department.

6 0
2 years ago
ma Rich purchased 100 shares of Stockits, Inc.'s $1 par value common stock from Stockits for $5 per share. Which statements are
vivado [14]

The correct options for Which statements are true regarding the effect of this transaction on Stockits' financial statements are B. Stockholders' equity on the balance sheet increases. C. The financing activities section of the statement of cash flows increases.

Equity is something invested in the company by using its owner or the sum of the entire belongings minus the sum of the company's general liabilities. E.g., common stock, additional paid-in capital, favored inventory, retained income, and the amassed different complete earnings.

For most companies, high stockholders' equity shows more stable finances and greater flexibility in case of an economic or financial downturn. information stockholders' equity is one way that buyers can learn about the monetary health of a firm.

Your question is incomplete. Please read below for the missing content.

ma Rich purchased 100 shares of Stockits, Inc.'s $1 par value common stock from Stockists for $5 per share. Which statements are true regarding the effect of this transaction on Stockits' financial statements? (Select all that apply.)

A. A gains will be reported on the income statement.

B. Stockholders' equity on the balance sheet increases.

C. The investing activities section of the statement of cash flows increases.

D. The financing activities section of the statement of cash flows increases.

E. Stockholders' equity on the balance sheet decreases.

Learn more about Equity here brainly.com/question/1957305

#SPJ1

4 0
2 years ago
Other questions:
  • Target cost-per-acquisition (cpa), which factors in auction-time signals including device, location, time of day, remarketing li
    15·1 answer
  • In the movie 9 to 5​, Maria Delgado worked mornings and her​ sister, who came in a few minutes before Maria​ left, worked the sa
    9·2 answers
  • Which of the following is one of the first things you should do when preparing to present yourself to employers?
    6·2 answers
  • Thomas & Cooke Corporation has the following sales forecasts for the first three months of the current year: Month Sales Jan
    12·1 answer
  • A third-grade class spends several weeks learning how to solve story problems (e.g., a girl buys three candy bars for 66 cents a
    8·1 answer
  • Sylas is studying financial planning in one of his classes. his teacher has assigned him to create a timeline of his financial f
    13·1 answer
  • The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the
    12·1 answer
  • Identify the following costs as fixed or variable:
    11·1 answer
  • Happy new year 2021 guys​
    15·2 answers
  • I
    9·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!