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Capital Structure and Leverage for Millman Electronics

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Millman Electronics will produce 60,000 stereos next year. Varibable costs will equal 50% of sales, while fixed costs will total $120,000. At what price must each widget be sold for the company to achieve an EBIT of $95,000?

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Solution Summary

The solution examines capital structure and leverage for Millman Electronics.The price each widget must be sold for is determined.

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Given that,
Number of stereos produced=60,000
Variable cost=50% of ...

Solution provided by:
Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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