McDonald's is a major company in the restaurant business

The computation and interpretation of the degree of combined leverage (DCL)You and your colleague, Malik, are currently particip

erastova [34]

Answer:

1. expected to be the same

2. expected decrease to 1.11

3. expected decrease to 2.67

Explanation:

1. Degree of Operating Leverage = Contribution margin ÷ Earning before interest and tax

= $48,000,000 ÷ $20,000,000

= $2.40

2. Degree of Financial Leverage = Earning before interest and tax ÷ Earning before tax

= $20,000,000 ÷ $16,000,000

= $1.25

3. Degree of total leverage = Contribution margin ÷ Earning before tax

= $48,000,000 ÷ $16,000,000

= $3.00

The repayment 50% of bank loan

1. The Degree of Operating Leverage is expected to be the same.

2. Degree of Financial Leverage = $20,000,000 ÷ $18,000,000 = 1.11

The Degree of Financial Leverage is expected to be decrease to 1.11

3. Degree of total leverage = $48,000,000 ÷ $18,000,000 = 2.67

The Degree of total leverage is expected that it will decrease to 2.67

4 0

3 years ago

• Compare and contrast the characteristics of the academic and practitioners research communities and explain which audience you

Natalka [10]

Answer:

The research is aimed to reach the academics audience because the terminology, the structure of the research report and the analisys of the findings should reach academic standards, being a starting point for developing practical strategies to bring together practical inconsistancies

7 0

3 years ago

Mayfield Company sells two products, Blue models and Plaid models. Blue models sell for $43 per unit with variable costs of $30

alekssr [168]

Answer:

Break-even point in total units= 951.7units

Explanation:

Break-even point is the level of activity at which a firm must operate such that its total revenue will equal its total costs. At this point, the company makes no profit or loss.

It is calculated using this formula:

Break-even point (in units) = Fixed cost/ average contribution per unit

Blue Plaid

Contribution per unit 43-30 = 13 52-45 = 7

Average contribution per unit

= ( (13× 4) + (7×5) )/9

= $ 9.66 per unit

Break-even point in total units

= $9200/$ 9.66

= 951.7units

Break-even point in total units= 951.7units

6 0

3 years ago

Suppose the countries of Iceland and Norway set up a free trade area, eliminating all trade barriers between themselves but main

geniusboy [140]

Answer:

Trade Bloc

Explanation:

Trade Bloc is a type of agreement between two sovereign nations in which barriers to trade are either reduced or totally eliminated between the two nations. This type of agreement can either be one agreement between several nations or a part of a regional organization.

So, the example of Iceland and Norway is an example of a trade bloc.

8 0

3 years ago

Which of the following mechanisms would be most likely to help motivate managers to act in the best interests of shareholders?

myrzilka [38]

Answer:

The correct answer is d) Increase the proportion of executive compensation that comes from stock options and reduce the proportion that is paid as cash salaries.

Explanation:

Option D. represents two situations that perfectly describe the interest that the shareholders pursue: the maximization of the profits of the company where they have their resources invested.

The shareholder, on the other hand, is also an investor, since he contributes capital with a view to obtaining a dividend.

Its investment is said to be in equities, given that there is no contract through which the shareholder will receive fixed fees in return for his investment. Their remuneration is through two ways:

Dividend
Increase in the price of the company. This is produced by its good progress and its ability to generate future benefits, as well as by the increase in assets through past benefits.

5 0

3 years ago