Sable Co. sells office stationery for $12.00 per package. The paper's variable cost per package is $7.00. Sable has fixed operating costs of $13,000 and fixed financing (interest) costs of $16,000. On average, Sable sells 10,000 units. What is Sables's degree of total leverage (DTL)?
Q: A family has a $134,345, 25-year mortgage at 5.1% compounded monthly. (A) Find the monthly payment…
A: Solution:- When a loan is taken, it is to be either repaid as a lump sum payment or in installments.…
Q: MG Golf has decided to sell a new line of golf clubs. The clubs will sell for $815 per set, with a…
A: Here, Tax Rate is 25% Cost of Capital is 10% Fixed Cost is $9.45 million Note: R&D Cost and…
Q: Suppose your firm is considering investing in a project with the cash flows shown below, that the…
A: Required return = 11% Time: 0 1 2 3 4 5 Cash flow: –$235,000 $65,800 $84,000 $141,000 $122,000…
Q: discuss Volkswagen deciding to go for a Foreign Direct Investement with Ghana
A: Volkswagen is the flagship brand of the Volkswagen Group, is a German motor vehicle manufacturer…
Q: Suppose that we make contributions to a fund of $125 today and $750 in two years for a return of…
A: We have to write the NPV as function of the discount factor ν and then proceed to calculate the…
Q: Joshua Industries is considering a new project with revenue of $478,000 for the indefinite future.…
A: Adjusted present value means that we have to determine the NPV (net present value) of a project in…
Q: The Sebastinian Arts Guild wants P5,000 at the end of each 2-months theater season for renovations.…
A: Given, The payments required is P5000 Rate is 9% compounded annually
Q: What are advantages and disadvantages of using derivatives? Discuss. Provide examples.
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…
Q: 4. First Metro Pacific was able to persuade Francis to join the company as its Assistant Vice…
A: The term "tax incentives" generally refers to tax laws that provide an opportunity to reduce the…
Q: The expected returns for the two assets are given below: Asset G 17% Year Asset F 2013 16% 2014 17…
A: Year Asset F Asset G 2013 16% 17% 2014 17% 16% 2015 18% 15% 2016 19% 15%
Q: Today's dividend yield for standard supply is computed by utilizing the formula C = A/S where A is…
A: A stock's dividend yield is a calculation of the investment's dividend-only return. The yield will…
Q: Alfred is a bachelor with a stable job. He is thinking of his future plans and one of his goal is to…
A: Future Value: The future value is the amount that will be received at the end of a certain period.…
Q: Malenia is looking to purchase a 10-year, $10,000 face value zero coupon bond. Assuming the current…
A: Price of zero-coupon bond = Face value / (1 + r) n Wherre, r = interest rate N = Time period a)…
Q: You wish to have $4,000 in 2 years to purchase a new entertainment system. How much money (to the…
A: Future value of an annuity: It represents the future value of the present annuity stream of cash…
Q: You have a 30-Year mortgage loan for $300,000 with an interest rate of 6% If you want to pay off…
A: First, we need to calculate annual repayment: Solved using Financial Calculator N = 30 I/Y = 6 PV =…
Q: Relate the 5 Set participants a. Cardholder b. Issuer c. Merchant d. Acquirer e. Certificate…
A: Secure Electronic Transaction (SET) is an open-source encryption and security standard for online…
Q: Beaver Corporation is investigating the purchase of a new threading machine that costs $18,000. The…
A: Here, To Find: Net present value =?
Q: Bellflower Co. stock costs $50 today.Use a1step binomial tree to estimate the price of a six-month…
A: Hedge ratio It is the ratio that justifies the portfolio value to be the same, regardless of which…
Q: Find the amount of $1000 invested for 10 years if the force of interest is 5%
A: Invested amount (P) = $1000 Period (t) = 10 Years Interest rate (r) = 5%
Q: Explain how the parties involved in a project finance manage risk.
A: Given, The parties are involved to manage the risk in a finance project. The finance project is a…
Q: Delta Corp has net income of $3 million, taxes of $4 million and depreciation expense of $6 million.…
A: Net income = $3 million Taxes = $4 million Depreciation = $6million
Q: Suppose you take out a 30-year mortgage for a house that costs $303,023. Assume the following: The…
A: A mortgage is a loan taken that has to be repaid in equal periodic installments. The monthly amount…
Q: What is the net operating profit after taxes (NOPAT) for 2020? Enter your answer in millions. For…
A: NOPAT: Net operating profit after tax is a measure indicating the performance of a company through…
Q: If a company already owns the land on which it plans to build a factory, the land should be treated…
A: If a company already owns the land on which it plans to build a factory, the land should be treated…
Q: This question conoerns BCA for building a permanent dam. The cost of constructing the permanent dam…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: 4. IBM stock is currently trading at $100 per share. An investor purchases one Call option contract…
A: A call option provides the holder the right but not the obligation, to buy a certain security at a…
Q: Scooter wishes to sell a bond that has a face value of $1,075. The bond bears an interest rate of…
A: Face value (FV) = $1075 Interest rate = 9.85% Quarterly interest rate (r) = 9.85%/4 = 2.4625% Yield…
Q: A family has a $134,345, 25-year mortgage at 5.1% compounded monthly. (A) Find the monthly payment…
A: Mortgage is a loan to buy a property or asset. The mortgage repayment in equal amount is an annuity…
Q: Jason Corporation has invested in a machine that cost $80,000, that has a useful life of eight…
A: Given: Particulars Amount Initial cost $80,000 Use life 8 Payback period 5
Q: 4 QUESTION 9 A wealthy donor has given $400,000 to a university and specifies that it is to be used…
A: An individual usually saves for the future through depositing the smaller amount of the funds from…
Q: Suppose that the general inflation rate is 5% and the real interest rate is 3%. Find the market…
A: Inflation can be defined as the increase in general price levels in the market. Inflation reduces…
Q: MACHINE A MACHINE B INITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED…
A: The Excel Formula sheet of above table is
Q: 6b. An initial $2000 investment is made that returns profits of $1000 and 1500 in the first and…
A: Here, Initial Investment is $2,000 Profit in Year 1 is $1,000 Profit in Year 2 is $1,500 Inflation…
Q: Scooter wishes to sell a bond that has a face value of $1,075. The bond bears an interest rate of…
A: Face value = $1075 Coupon rate = 9.85% Interest payment = Quarterly Yield rate = 11.12%
Q: 8d. A large profitable corporation is considering a capital investment of $50,000. The equipment has…
A: Cash flow of a project evaluates how cash flows in and out of a business. Inflation is the general…
Q: Monica is planning to buy a house and lot in Batangas worth 1,450,000 today, she wants to know the…
A: The property price after 7 years can be calculated with the help of future value function
Q: Sherry has a goal of retiring with $371,060 by making weekly deposits into an investment account…
A: When payments are made in equal intervals of equal amounts, it is called annuity. The total amount…
Q: Economics Sherry has a goal of retiring with $371,060 by making weekly deposits into an investment…
A: First, we need to calculate the weekly deposit made. Weekly Deposits made: N = 52* 27 years = 1404…
Q: You purchase an RV by making a down payment of $10,700. The terms of your finance agreement have an…
A: Down payment (DP) = $10,700 Interest rate = 2.56% Monthly interest rate (r) = 2.56%/12 =…
Q: An investment of P270,000 can be made in a project that will produce a uniform annual revenue of…
A: NPV It is a capital budgeting tool to decide on whether the capital project should be considered or…
Q: Scooter wishes to sell a bond that has a face value of $1,075. The bond bears an interest rate of…
A: Face value of the bond = $1075 Coupon rate = 9.85% Quarterly coupon rate = 9.85%/4 = 2.4625% Yield…
Q: The payback rule is generally most useful when:
A: The payback period is the time taken to recover the money spent on the project. According to the…
Q: Cooper Grant is the president of Acme Brush of Brazil, the wholly owned Brazilian subsidiary of…
A: In practice, financial statement consolidation involves a corporation integrating and combining all…
Q: STATE: Which of the following statements regarding homeowner's irsurance is true A. The listing…
A: Homeowner's insurance policy is the insurance policy for your home. It generally covers any…
Q: lden Bling, an aged jewellery distributor, issues dividends semi-annually. The most recent divided…
A: Recent Dividend = $0.90 Growth rate = 9% Cost of equity = 12% Special Dividend = $1.70
Q: Better plc is comparing two mutually exclusive projects, whose details are given below. The…
A: The capital budgeting techniques help us to decide which project should be undertaken. The NPV and…
Q: ou have a 30-year mortgage loan for $250,000 with an interest rate of 6% which requires you to make…
A: This pertains to time value of money. The concept of time value of money tells us that worth of…
Q: Which of the following is NOT true. An options contract is a contractual agreement between two…
A: Option trading allows a person to buy or sell an asset at a particular price. The price of an option…
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: Net Present Value(NPV) is one of the modern techniques of capital budgeting which considers the time…
Q: Ideal Living Company has 8.5 percent bonds outstanding that are paid semi-annually and has the YTM…
A: A Bond refers to an instrument that represents the loan being made by the investor to the company…
Sable Co. sells office stationery for $12.00 per package. The paper's variable cost per package is $7.00. Sable has fixed operating costs of $13,000 and fixed financing (interest) costs of $16,000. On average, Sable sells 10,000 units. What is Sables's degree of total leverage (DTL)?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The companys monthly fixed expenses are $72,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of January when they will sell 500 units. How many units will Kerr need to sell in order to realize a target profit of $120,000? What dollar sales will Kerr need to generate in order to realize a target profit of $120,000? Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. The companys monthly fixed expenses are $22,500. What is the companys break-even point in units? What is the companys break-even point in dollars? Construct a contribution margin income statement for the month of September when they will sell 900 units. How many units will Maple need to sell in order to reach a target profit of $45,000? What dollar sales will Maple need in order to reach a target profit of $45,000? Construct a contribution margin income statement for Maple that reflects $150,000 in sales volume.
- Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs per gas grill are 225, and the average price per gas grill is 600. Required: 1. How many gas grills must Gelbart Company sell to break even? 2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income? 3. If Gelbart Companys variable costs increase to 240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000Marlin Motors sells a single product with a selling price of $400 with variable costs per unit of $160. The companys monthly fixed expenses are $36,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of November when they will sell 130 units. How many units will Marlin need to sell in order to realize a target profit of $48,000? What dollar sales will Marlin need to generate in order to realize a target profit of $48.000? Construct a contribution margin income statement for the month of February that reflects $200,000 in sales revenue for Marlin Motors.
- Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shell. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320.000. However, the $130 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order? A. Profits will decrease by $1,200. B. Profits will increase by $31,200. C. Profits will increase by $600. D. Profits will increase by $7,200.Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?
- Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.Abilene Industries manufactures and sells three products (XX, W, and ZZ). The sales price and unit variable cost for the three products are as follows: Their sales mix is reflected as a ratio of 4:2:1. Annual fixed costs shared by the three products are $345.000 per year. What are total variable costs for Abilene with their current product mix? Calculate the number of units of each product that will need to be sold in order for Abilene to break even. What is their break-even point in sales dollars? Using an income statement format, prove that this is the break-even point.