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Nat2105 [25]
2 years ago
8

2. An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million, interest costs of $2 millio

n, and a 30 percent average tax rate. A) Compute its DOL, DFL, and DCL. B) What will be the expected level of EBIT and net income if next year's sales rise 10 percent? C) What will be the expected level of EBIT and net income if next year's sales fall 20 percent?
Business
1 answer:
tankabanditka [31]2 years ago
6 0

Answer:

A) DOL = 1.33 times; DFL = 1.80 times; and DCL = 2.4 times

B) Next years expected Earnings before interest and tax = $5.5 million; and Net years expected net income = $2.45 million

C) Next years expected Earnings before interest and tax = $2.5 million; and Net years expected net income = $0.35 million

Explanation:

Note: This platform did allow the explanation to be saved here as it was claiming it contains swearwords. Please, see the attached pdf file for the full answer and explanation.

Download pdf
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The management of urbine corporation is considering the purchase of a machine that would cost $340,000 would last for 4 years, a
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The net present value of the proposed project is closest to -$80,822.

Since the project saves $80,000 in costs each year, we treat these savings income for the next 4 years. We then calculate the Present value Interest Factor of an annuity using the formula :

PVIF of an annuity = { [ 1 - [ (1+r)⁻ⁿ ] } ÷ r

PVIF of an annuity = { [ 1 - [ (1.09)⁻⁴ ] } ÷ 0.09

PVIF of an annuity = 3.240 (rounded to three decimals)

PV of the cost savings = (3.240*80000) = $2,59,178 (rounded to nearest $)

NPV = PV of cost savings - Value of investment

NPV = 2,59,178 - 3,40,000

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3 years ago
The cost of the merchandise inventory that the business ▼ has sold to customers.
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c a type of marchandiser that buys merchadise from a manufacture


8 0
3 years ago
What characteristic is somewhat shared by perfect competition and
kakasveta [241]

Answer:

Ease of entering

Explanation:

The main difference between perfect competition and monopolistic competition is that firms sell a similar product in perfect competition. In monopolistic competition, firms sell differentiated products.

In both market structures, their many seller and buyers. There is the ease of entry and exit for suppliers. In both markets, there are no dominant suppliers.

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3 years ago
Which of the following is a risk (or potential pitfall) of cost leadership? Multiple Choice a. Cost differences increase as the
musickatia [10]

Answer:

d. Cost cutting in one area of the value chain might increase costs in another.  

Explanation:

Although cost leadership is an efficient way to dominate the competition,it does have potential pitfalls if not executed correctly. For example, if operating cost is decreased, the changed product feature may imply a higher marketing cost afterward. In order to be truly efficient, the cost leadership strategy has to be implemented in such a way, so it doesn't impact other value chain costs negatively (increasing them).

6 0
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Isabel and Josh engage in a business transaction that leads to a dispute. Isabel initiates a lawsuit against Josh by filing a co
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Answer:

(b.) Isabel will have a judgment entered in her favor

Explanation:

Under the Rules of the court Josh's action is referred to as Default of Appearance.  Isabel is the Complainant while Josh is the Defendant.

It is the law that where a Defendant fails to appear before the court where there is a proof of service of the summons on him or her, Complainant may apply to the Judge for a judgement in respect of the claim on the summons to be entered in his or her favor against the Defendant.

Therefore, in the instance case at hand, Isabel will have a judgment entered in her favor for failure of Josh to appear before the court.

Option (a) is not the answer because Isabel does not need to file an amended complaint because Isabel did not ask the court for any amendment of her complaint. Isabel can only file an amended complaint if she intends to change her complaint against Josh.

Option (c) is not also the answer because Josh chooses to ignore the summons served on him. If for instance Josh did not get the summons served on him or the judge is of the opinion that Josh was not properly served, then the court can order that Josh must be served with a second summons.

Option (d) is also not the answer because Josh cannot have a judgment entered in his favor because he is the person who defaulted appearance before the court. A party who is in default of appearance cannot have judgment entered in his favor.

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