Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Corporate Finance Expert

Sales (10,500 skates @ $60 each)                           $    630,000 
Less: Variable costs (10,500 skates at $25)                    262,500 
     Fixed costs                                                          200,000 
                                                             ___________________________
  Earnings before interest and taxes (EBIT)                    167,500 
  Interest expense                                                     62,500 
                                                             ___________________________
  Earnings before taxes (EBT)                                      105,000 
  Income tax expense (30%)                                       31,500 
                                                            ____________________________
  Earnings after taxes (EAT)    $                                  73,500 
                                                           _____________________________

 Enter only numeric value rounded to 2 decimal places.

a) find out the degree of operating leverage.
b) find out the degree of financial leverage.
c) find out the degree of combined leverage.
d) find out the break-even point in units (number of skates).

Corporate Finance, Finance

  • Category:- Corporate Finance
  • Reference No.:- M9650

Have any Question? 


Related Questions in Corporate Finance

Descriptionstudents are required to study undertake

Description: Students are required to study, undertake research, analyse and conduct academic work within the areas of corporate finance. The assignment should examine the main issues, including underlying theories, impl ...

Assignment - pro forma financial statements external

Assignment - Pro forma financial statements, external capital needs and growth rates Pro-forma financials using percentage of sales method; 1. Obtain financial statements for a company for the last three years. The compa ...

Principles of financial investment assignment - the market

Principles of Financial Investment Assignment - "The market can solve all of society's needs." Discuss the above statement with particular reference to the financial markets. Your essay should be approximately 2,000 word ...

Interest swap valueabc bank has agreed to receive 3-month

Interest swap value ABC bank has agreed to receive 3-month LIBOR and pay 8% per annum on a notional principal of $100 million. The swap has a remaining life of 11 months. The LIBOR spot rates for 2-month, 5-month, 8-mont ...

Questions -q1 global auto wants to choose the better of two

Questions - Q1. Global Auto wants to choose the better of two mutually exclusive projects for expanding the firm's production capacity. The relevant cash flows for the projects are shown in the following table. The firm' ...

Question - international foods have the following capital

Question - International Foods have the following capital structure: Book Value (sh.) Market Value(sh) Equity capital (2.5 million shares of sh. 10 par) 25,000,000 45,000,000 Preference capital (50,000 shares of sh,100 p ...

Financial modelling assignment -1 today is 1 january 2018

Financial Modelling Assignment - 1. Today is 1 January 2018. Jackson who is aged 80 has a portfolio which consists of three different types of financial instruments (henceforth referred to as instrument A, instrument B a ...

Question - an 8 bond with remaining maturity of 8 years is

Question - An 8% Bond with remaining maturity of 8 years is quoted in the Band Market at 89.33 at current going market interest rate of 10%. If the market interest rate suddenly goes up from 10% t0 15%, the Price of this ...

Assignment - npv and real option valuationproposed project

Assignment - NPV and real option valuation Proposed project: Alchemy Mines is considering an investment in the rights to a silver mine. Initial investment - The owner of the mine will sell the rights to Alchemy Mines at ...

Assignment -part a - saturn petcare australia and new

Assignment - Part A - Saturn Petcare Australia and New Zealand is Australia's largest manufacturer of pet care products. Saturn have been part of the Australian and New Zealand pet care landscape since opening their firs ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As