Business, 10.05.2021 16:10 JvGaming2001
If we consider the effect of taxes, then the degree of operating leverage can be written as:
DOL = 1 + [FC × (1 – TC) – TC × D]/OCF
Consider a project to supply Detroit with 28,000 tons of machine screws annually for automobile production. You will need an initial $4,800,000 investment in threading equipment to get the project started; the project will last for 5 years. The accounting department estimates that annual fixed costs will be $1,150,000 and that variable costs should be $215 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 5-year project life. It also estimates a salvage value of $525,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $320 per ton. The engineering department estimates you will need an initial net working capital investment of $460,000. You require a return of 14 percent and face a tax rate of 25.
Required:
a. What is the percentage change in OCF if the units sold changes to 28,000?
b. What is the DOL at the base-case level of output?
Answers: 3
Business, 22.06.2019 03:30
Joe said “your speech was really great, i loved it.” his criticism lacks which component of effective feedback? a) he did not recognize his ethical obligations b) he did not focus on behavior c) he did not stress the positive d) he did not offer any specifics
Answers: 2
Business, 22.06.2019 05:20
What are the general categories of capital budget scenarios? describe the overall decision-making context for each.
Answers: 3
Business, 22.06.2019 14:30
If a product goes up in price, and the demand for it drops, that product's demand is a. elastic b. inelastic c. stable d. fixed select the best answer from the choices provided
Answers: 1
Business, 22.06.2019 16:40
Shawn received an e-mail offering a great deal on music, movie, and game downloads. he has never heard of the company, and the e-mail address and company name do not match. what should shawn do?
Answers: 2
If we consider the effect of taxes, then the degree of operating leverage can be written as:
DOL =...
Mathematics, 04.11.2020 19:20
Mathematics, 04.11.2020 19:20
History, 04.11.2020 19:20
Arts, 04.11.2020 19:20
Business, 04.11.2020 19:20
Mathematics, 04.11.2020 19:20
French, 04.11.2020 19:20
English, 04.11.2020 19:20
Biology, 04.11.2020 19:20
Mathematics, 04.11.2020 19:20
English, 04.11.2020 19:20
Chemistry, 04.11.2020 19:20
Mathematics, 04.11.2020 19:20
Mathematics, 04.11.2020 19:20