a. What is the degree of operating leverage of Modern Artifacts (in Problem 14) when sales are
Question:
a. What is the degree of operating leverage of Modern Artifacts (in Problem 14) when sales are $7,000?
b. What is the degree of operating leverage when sales are $12,000?
c. Why is operating leverage different at these two levels of sales?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 61% (18 reviews)
DOL a Profit revenues variable costs fixed costs depreciation 7000 5250 ...View the full answer
Answered By
Akshay Agarwal
I am a Post-Graduate with a specialization in Finance. I have been working in the Consulting industry for the past 8 years with a focus on the Corporate and Investment Banking domain. Additionally, I have been involved in supporting student across the globe in their academic assignments and always strive to provide high quality support in a timely manner. My notable achievements in the academic field includes serving more than 10,000 clients across geographies on various courses including Accountancy, Finance, Management among other subjects. I always strive to serve my clients in the best possible way ensuring high quality and well explained solutions, which ensures high grades for the students along-with ensuring complete understanding of the subject matter for them. Further, I also believe in making myself available to the students for any follow-ups and ensures complete support and cooperation throughout the project cycle. My passion in the academic field coupled with my educational qualification and industry experience has proved to be instrumental in my success and has helped me stand out of the rest. Looking forward to have a fruitful experience and a cordial working relationship.
5.00+
179+ Reviews
294+ Question Solved
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Question Posted:
Students also viewed these Corporate Finance questions
-
The degree of operating leverage for Dousmann Corp. and PCB Co. are 1.4 and 5.6, respectively. Both have net incomes of $50,000. Determine their respective contribution margin s.
-
The degree of operating leverage for Montana Corp. and APK Co. are 1.6 and 5.4, respectively. Both have net incomes of $50,000. Determine their respective contribution margin s. Discuss.
-
The degree of operating leverage for Astoria Corp. and STL Co. are 1.4 and 5.6, respectively. Both have net incomes of $50,000. Determine their respective contribution margin s.
-
If $4000 is deposited into an account paying 3% interest compounded annually and at the same time $2000 is deposited into an account paying 5% interest compounded annually, after how long will the...
-
Steve Goodman, production foreman for the Florida Gold Fruit Company, estimates that the average sale of oranges is 4,700 and the standard deviation is 500 oranges. Sales follow a normal...
-
An equal distribution of income would _________. a) hurt both the work incentive and the incentive to save b) hurt neither the work incentive nor the incentive to save c) hurt the work incentive but...
-
Question: To ensure that its employees did not use illegal drugs in or outside of the workplace, Rain Co. required all employees to take a lie detector test. Moreover, managers began to screen the...
-
Hamilton Processing Company uses a weighted-average process costing system and manufactures a single product'a premium rug shampoo and cleaner. The manufacturing activity for the month of October has...
-
Other information: 1) Inventories as at 31 December 2020 was RM15,000. 2) The company management decided to write off further bad debts of RM2,000. Provision for doubtful debts is at 5% of Trade...
-
Simplex Corporation provides the following information at the end of 2015. Salaries payable to workers at the end of the year ................ $ 3,500 Advertising expense for the year...
-
You estimate that your cattle farm will generate $ 1 million of profits on sales of $4 million under normal economic conditions and that the degree of operating leverage is 8. a. What will profits be...
-
a. Approval of the capital budget allows manager to go ahead with any project included in the budget. b. Project authorizations are mostly developed "bottom-up." Strategic planning is a "top-down"...
-
Refer to the previous question but assume that the government has imposed a per-unit tax on this product that is exactly equal to the marginal damage costs. Use the diagram to show what will happen...
-
List FIVE (5) principles of learning applicable to training and development in organizations with a brief description.?
-
Hemming Company reported the following current-year purchases and sales for its only product. Date January 1 January 10 March 14 March 15 July 30. October 5 Activities Beginning inventory Sales...
-
To more efficiently manage its inventory, Treynor Corporation maintains its internal inventory records using first-in, first-out (FIFO) under a perpetual inventory system. The following information...
-
1.What (if anything) is it aboutNetflixthat makes its HR practices work forNetflix? 2.Would you suggest using similar practices in other businesses, such as, say, a new restaurant? Why? 3. List the...
-
What is the importance of understanding management skills versus management traits? How can someone execute both of them?
-
In a related rates problem, there can be more than two quantities that vary with time. Determine whether each of the following statements is true or false, and explain why.
-
"Standard-cost procedures are particularly applicable to process-costing situations." Do you agree? Why?
-
What is the payback period of each project? Refer to two projects with the following cash flows: Project A Project B Year -$200 -$200 80 100 80 100 80 100 4 80
-
A bonds credit rating provides a guide to its risk. Suppose that long-term bonds rated Aa currently offer yields to maturity of 7.5%. A-rated bonds sell at yields of 7.8%. Suppose that a 10-year bond...
-
Construct a balance sheet for Fincorp for 2018 and 2019. What is shareholders? equity? 2018 2019 $4,000 $4,100 Revenue Cost of goods sold 1,600 1,700 500 Depreclatlon 520 Inventorles 300 350...
-
NPV and IRR The first two scenarios are independent. All cash flows are after-tax cash flows. The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following...
-
On January 1, 2021, NOP Company signed an agreement to operate as a franchise. Annual payment at the beginning of each year for 3 periods, starting January 1, 2021 P300,000 Initial direct cost rela...
-
HGAM Inc, has the following information for February: Beginning Work in Process Inventory (70% complete as to conversion) 6,000 units Started 24,000 units Ending Work in Process Inventory (10% c...
Study smarter with the SolutionInn App