If the IRR of Machine C is 12.5% and the IRR of Machine D is 11%, then it correct to conclude that Machine C is more profitable than Machine D. True False
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- U.S. Steal has the following income statement data: UnitsSold TotalVariableCosts FixedCosts TotalCosts TotalRevenue OperatingIncome(Loss) 100,000 $ 300,000 $ 90,000 $ 390,000 $ 600,000 $ 210,000 120,000 360,000 90,000 450,000 720,000 270,000 The top row of the table has the beginning values and the bottom row of the table has the ending values. a. Compute the degree of operating leverage (DOL) based on the formula below. (Do not round intermediate calculations. Round your final answer to 2 decimal places. Calculate Degree of Operating levarege? b. Recompute DOL using the formula given below. There may be a slight difference due to rounding. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Calculate Degree of Operating levarege?Assuming that NUBD increased sales of Product X by 25 percent, what should the profit from Product X be?Adams Inc. has the following data, rRF = 5%, RPm = 6% and Beta = 1.05. What is the firms cost of common from reinvested earning using CAPM? (11.30%, 12.72%, 11.64%, 11.99%, and 12.35%)
- Using ror method calculate which one is more profitable for the company marr is 10%?If the asset base is decreased by P100,000, with no other changes, the return on investment of X Division will beFor a certain company, the cost function for producing x items is C(x)=40x+200, and the revenue function for selling x items in R(x)=−0.5(x−80)2+3,200. The maximum capacity of the company is 110 items. The profit function P(x) is the revenue function R(x) (how much it takes in) minus the cost function C(x) (how much it spends). In economic models, one typically assumes that a company wants to maximize its profit, or at least make a profit!Assuming that the company sells all that it produces, what is the profit function?P(x)= Preview Change entry mode . Hint: Profit = Revenue - Cost as we examined in Discussion 3. What is the domain of P(x)?Hint: Does calculating P(x) make sense when x=−10 or x=1,000? The company can choose to produce either 40 or 50 items. What is their profit for each case, and which level of production should they choose?Profit when producing 40 items = Number Profit when producing 50 items = Number Can you explain, from our model, why the company makes less profit…
- Peform a sensitivity analysis by answering the following questions: A. What is the break-even point in sales dollars for RBC? B. What is the margin of safety for RBC? C. What sales dollars would be required to achieve an operating profit of $170,000? $440,000?A product is currently reported on the balance sheet at a cost of $29. The selling price of the product is currently $30 and disposal costs are $3. If the company had to buy the product today, it would pay $28. The product has a normal profit margin on sales of 30%. What amount should the product be valued at under each of the following methods? Lower of Cost or Market (LCM) Lower of Cost of Net Realizable Value (LCNRV)Bogart Company is considering two alternatives. Alternative A will have revenues of $160,000 and costs of $100,000. Alternative B will have revenues of $180,000 and costs of $125,000. Compare Alternative A to Alternative B showing incremental revenues, costs, and net income.
- A firm has a cost function C(x)=10x+107, where x represents the number of units produced. the firm's revenue function is R(x)=38x if x is equal to 78 find the firm's profit. round to the nearest whole numberCompany A’s operations involve a fixed cost £1m and variable cost equal to 70% to revenues. Company B has £3m fixed costs and variable costs equal to 50% of revenues. The two companies are similar in all other respects. Determine which of the following statements is the most accurate? A. Company A has a higher degree of operating leverage and thus a higher beta than company B B. Company A has a lower degree of operating leverage and thus a higher beta than company B C. Company A’s profits are less sensitive to demand shocks and therefore A has a lower Beta than B D. Company B’s profits are less sensitive to demand shocks and therefore B has a lower Beta than ACompanies are presented with viable alternatives that sometimes produce nearly identical results and profitability goals. If they have the ability to invest in both alternatives, they may do so. But what about when resources are constrained? How do they choose which investment is best for their company? Consider this: you have two projects that met the payback period and accounting rate of return screenings identically. Project 1 produced an NPV of $45,000 and had an IRR between 5% and 8%. Project 2 produced a NPV of $35,000 and had an IRR of 10%. This leaves you with a difficult choice, since each alternative has a measurement that exceeds the other and the other variables are the same. Which project would you invest in and why?