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Capital Structures and Break Even Point

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16-6
Why do public utility companies usually have capital structures that are different from those of retail firms?

16-1
Company XYZ has fixed operating costs of $500,000 and variable costs of $50 per unit. If it sells the product for $75 per unit, what is the break-even quantity? (must show work)

17-1
What term refers to the uncertainty inherent in projections of future ROIC?

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16-6
Why do public utility companies usually have capital structures that are different from those of retail firms?

Capital structure means mix composition of debt and equity in the organization. It affects the cost of capital of the organization. A firm's long-term success depends upon the firm's investments earning a sufficient rate of return. This sufficient or minimum rate of return necessary for a firm to succeed is called the cost of capital. They are important to the determination of capital structure because as the level of debt financing increases, the contractual and monitoring costs are expected to increase.
As the use of debt financing increases, the cost of debt and equity both increase at an increasing rate due to ...

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