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Operating leverage and combined leverage

Degree of operating leverage? Degree of Combined leverage: Sales: 440,000 TVC: 240,000 Fixed Costs: 96,000 EBIT: 104,000 Interest 19200 EBT 84800 Tax at 35% 29680 net Income 55120 Shares outstanding: 16000 EPS

Arithmetic Average, Standard Deviation and Returns

Calculate the arithmetic average, the geometric average, the variance and standard deviation For the S&P 500 index for the decade of 1980-1990. Do the same calculations for the S&P 500 index for 2000-2010. Compare and contrast your answers and provide explanations for the similarities and differences. Calculate the statistical

Description of Leverage Analysis and Break-Even Analysis

Please answer the following questions: 1. An analytical income statement for Detroit Heat Treating is shown below. It is based on an output (sales) level of 40,000 units. Sales $480,000 Variable costs _2_8__0_,_0_0_0 Revenue before fixed costs $200,000 Fixed costs _1_2__0_,_0_0_0 EBIT $ 80,000 Interest expense __3__0_

Business Finance Reasoning: Cash Flows and Capital Structure

Explain the reasoning behind the focus on cash flows rather than accounting profits in making our capital-budgeting decisions. Why are we interested only in incremental cash flows rather than total cash flows? If depreciation is not a cash flow item, why does it affect the level of cash flows from a project in any way? Wh

E 12-6

E 12-6 On February 18, 2011, Union Corporation purchased 10,000 shares of IBM common stock as a long-term investment at $60 per share. On December 31, 2011, and December 31, 2012, the market value of IBM stock is $58 and $61 per share, respectively. Required: 1.What is the appropriate reporting category for this invest

Contribution margin .

Use the formula stated: Contribution Margin = Revenue - Variable Costs (CM = R - VC) Your top two Agents ... Let's call them ... Agent J and Agent K, both bring in two "must do deals" with new extraterrestrial ah ... accounts. Agent J's is for $ 100,000 ... 50 units at sales price $2,000 per unit Agent K's is for $ 50,0


a. What is the definition of price elasticity of demand? b. Explain the relationship between price elasticity and total revenue? How does price elasticity of demand affect a firmâ??s pricing decisions? c. How does the availability of substitutes affect price elasticity of demand? Provide examples. Pleas

Finance: Calculate EMC's value of operations

EMC Corporation has never paid a dividend. It's current free cash flow of $400,000 is expected to grow at a constant rate of 5%. The weighted average cost of capital is WACC = 12%. Calculate EMC'S value of operations.

Corporate Finance

Manyops, Inc., is a manufacturing firm that has experienced strong competition in its traditional business. Management is considering joining the trend to the "service economy" by eliminating its manufacturing operations and concentrating on providing specialized maintenance services to other manufacturers. Management of Manyop

Financial Models

Need to show calculations in excel #1: During the year, the Senbet Discount Tire Company had gross sales of $1.2 million. The firm's cost of goods sold and selling expenses were $450,000 and $225,000, respectively. Senbet also had notes payable of $900,000. These notes carried an interest rate of 9%. Depreciation was $110,0

Comparing Performance Evaluation Methods

Top management of the Gates Corporation is trying to construct a performance evaluation system to use to evaluate each of its three divisions. This past years financial data are as follows: Division A Division B Division C Total assets

ELN Waste Management: ROI and EVA

ELN Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows. Hazardous Waste Residential Waste Total assets

Incentives to Over-Invest and Under-Invest

Consider two companies: Quantum Products and Aquafin Products. Senior managers at Quantum Products are evaluated in terms of increases in profit. In fiscal 2011, Quantum Products had a net operating profit after taxes of $2,500,000 and invested capital of $25,000,000. In fiscal 2012, the company had net operating profit after ta

Cash flows for proposed project

Which of the following should be considered when a company estimates the cash flows used to analyze a proposed project? a. The new project is expected to reduce sales of one of the company's existing products by 5%. b. Since the firm's director of capital budgeting spent some of her time last year to evaluate the new project

Loaning versus investing available funds

In recent years banks have shown a greater tendency to loan out available funds rather than invest them. What impact, if any, does this have on the effectiveness of monetary policy actions taken by the Federal Reserve? Why do you suppose that the banks are under-going this change?

Finance: Project's NPV

Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below. The company owns the building that would be used, and it could sell it for $100,000 after taxes if it decides not to open the new office. The equipment for the project would be depreciated by the straight-line method over the project's

NVP for TextMex Food Company

TexMex Food Company is considering a new salsa whose data are shown below. The equipment to be used would be depreciated by the straight-line method over its 3-year life and would have a zero salvage value, and no new working capital would be required. Revenues and other operating costs are expected to be constant over the proje

Finance: Calculating the Year 1 Cash Flow

As a member of UA Corporation's financial staff, you must estimate the Year 1 cash flow for a proposed project with the following data. What is the Year 1 cash flow? Sales revenues, each year $42,500 Depreciation $10,000 Other operating costs $17,000 Interest expense $4,000 Tax rate 35.0%.

Finance: What is Clemson Software project's Year 1 cash flow?

Clemson Software is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after which it will be worthless, and it will be depreciated by the straight-line method over 3 years. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is t

Simple Cash Flow Calculation

As assistant to the CFO of Boulder Inc., you must estimate the Year 1 cash flow for a project with the following data. What is the Year 1 cash flow? Sales revenues $13,000 Depreciation $4,000 Other operating costs $6,000 Tax rate 35.0%

Debt Crisis of Greece

Debt crisis of Greece: what is it about? What are the positive and negative impacts of the subject to finance development?

A Discussion on Mobilizing Finances

Task: To avoid unnecessary intervention and outsider control in your venture firm, is it best to mobilize finances from your own assets, family, and friends. How far do you agree with this statement?

Calculate losses to Callaghan Company

1. Losses to Callaghan Company are assumed to be distributed normally, with a mean of $75,000 and a standard deviation of $4,000. Calculate the probable range of losses if the risk manager desires 95 percent confidence in the estimate. 2. QAZ Company owns a fleet of 100 automobiles, for which the probability of loss is appro

Finance: AR level, debt ratio, market to book ratio, P/E, ROE

3-1 Green Sisters has a DSO of 20 days. The company's average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year. 3-2 Vigo Vacations has an equity multiplier of 2.5. The company's assets are financed with some combination of long- term debt and common equity. What

Finance: Garber Company: Compute cost driver rates, and ABC costing

Please see the attached file. Garber Company uses a traditional activity-based costing system to assign $600,000 of committed resource costs for customer service on the basis of the following information gathered from interviews with customer service personnel: Activity Time Percentage Estimated Cost Driver Qua

Price for Booking Airlines and Hotels

You've decided to take a trip to San Juan, Puerto Rico. You will leave one month from today and stay for 7 nights. You need to purchase a plane ticket and a hotel room. Search for these two items individually at airline and hotel web sites. What airline and hotel did you find, and what were the prices of each? Next, search f

Financial Ratios: Accounts Receivable, Debt Ratio, P/E Ration, ROE

(3-1) Days Sales Outstanding Greene Sisters has a DSO of 20 days. The companys average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year. (3-2) Debt Ratio Vigo Vacations has an equity multiplier of 2.5. The companys assets are financed with some combination of long-term