A firm has sales of Rs.5, 00,000, variable cost Rs. 3, 50,000 and fixed cost Rs.1, 00,000 and debt of Rs.2,50,000 at 10 per cent interest. Calculate the operating, financial and combined leverage.
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A firm has sales of Rs.5, 00,000, variable cost Rs. 3, 50,000 and fixed cost Rs.1, 00,000 and debt of Rs.2,50,000 at 10 per cent interest. Calculate the operating, financial and combined leverage.
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- 2). annually. Company’s annual sales are OMR (4) million, its tax rate is 30%, and its rate on equity (ROE) is 20% and tota asset (TA)was OMR (1500) thousand. Omani Company sold .product at OMR 5.50 per unit; its variable operating costs are OMR (2.5) per unit -:Answer the following .Calculate the firm’s degree of Operating leverage a) .Calculate the firm’s degree of financial leverage b) ?What is the combine effect of fixed Operating and Financial Costs c)The Omani Company has OMR (800) thousand of total debt (Liabilities) outstanding (Liabilities), and it pays an interest of OMR (80) thousandBulldogs Inc. has sales of P4,500,000, variable costs equal 75% of sales, and a fixed interest costs of P750,000. The current operating income of the firm is P1,050,000. What is the degree of combined leverage?Bulldogs Inc. has sales of P4,500,000, variable costs equal 75% of sales, and a fixed interest costs of P750,000. The current operating income of the firm is P1,050,000. What is the degree of combined leverage? a. 5.85 b. 3.75 c. 4.25 d. 4.05
- Petra plc. has a current and target leverage ratio of 0.8, the finance cost from loans is 16 per cent, and a cost of equity of 20 per cent. The corporation tax rate is 35 per cent. What is the weighted cost of capitalA company has an operating leverage factor of 4. When its sale increased to Php 500,000.00, its profit before tax increased by 100%. its variable cost ratio is 40%, How much is the company's fixed costs?A firm has a profit margin of 15% on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500.00, and a after-tax interest cost on total debt of 5%, what is the firm's ROA?
- Hong Sdn Bhd makes a patented rubber tapping machine that sells for RM6. Each machine has a variable operating cost of RM3. Fixed operating costs are RM60,000 per year, and the company pays RM12,000 in interest and preferred dividend of RM6,000 per year. Currently, the company is selling 30,000 machines per year and is taxed at a rate of 40 %. What is the meaning of the term leverage? Discuss operating, financial and total leverage and the relationships among them. What is Hong Sdn Bhd’s operating breakeven point, EBIT and earnings available for ordinary shares? Calculate the company’s degree of operating leverage ( DOL), degree of financial leverage ( DFL) and degree of total leverage ( DTL). Comment on your findingsChoose the correct letter of answer: In the current year, Company A had P15 Million in sales, while total fixed costs were held to P6 Million. The firm's total assets at year-end were P20 Million and the debt/equity ratio was calculated at 0.60. If the firm's EBIT is P3 Million, the interest on all debt is 9%, and the tax rate is 40%, what is the firm's return on equity? a. 11.16%b. 14.4%c. 18.6%d. 24.0%e. 28.5%Aruz Berhad sells its product at RM45 per unit. Fixed cost per year is RM220,000 while variable cost is RM15 per unit. The firm has debt capital of RM450,000 and its interest rate is 7%. Firm tax rate is 30% and the total number of shares issued is 300,000 units. You are required to: Calculate earnings before interest and tax (EBIT) and earnings per share (EPS) at total sales of 15,000 units. Calculate the degree of financial leverage at sales level of 15,000 units.
- A firm has a tax burden ratio of .75, a leverage ratio of 1.25, an interest burden of .6, and a return on sales of 10%. The firm generates $2.40 in sales per dollar of assets. What is the firm’s ROE?A firm expects to sell 11,500 units. The expected variable cost per unit is $314 and the expected fixed costs are $647,000. The depreciation expense is $187,000. The sales price is estimated at $850 per unit. The tax rate is 21%. What is the operating cash flow based on this analysis?Red Company has a profit margin of 15 percent on sales of $20,000,000. If the firm has a debt of $7,500,000, total assets of $22,500,000, and an interest cost on a total debt of 5 percent, what is the firm's return on total assets (ROA)? (Round answer to two decimal places.)