The data below, in millions of dollars, were taken from the 2013 Form 10-K of Zipcar. Zipcar

Question:

The data below, in millions of dollars, were taken from the 2013 Form 10-K of Zipcar. Zipcar is a very short-term car rental company, specializing in providing cars for periods that can be as short as an hour.image text in transcribed

A. Compute the change in 2013 in:

a. Revenues

b. Operating expenses.
B. Compute the ratio of the change in operating expenses in 2013 to the change in revenues.
C. Using your results from part B, estimate the variable costs in the 2013 operating expenses.
D. Using your results from part C, estimate the fixed costs in the 2013 operating expenses.
E. Compute the operating leverage effect for this company in 2013.
F. This is a relatively new company. If its sales increase substantially in 2014, would you expect profits to increase proportionally to sales, or faster than sales? Explain.
G. If sales grow substantially in 2014, would you expect operating leverage to stay the same, or go down? Explain your answer.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Question Posted: