Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2023 and expects the company to sell 2,000 cars in 2023. The project forecast financial information is as follows: Selling price per Car(P) $ 200.000

image text in transcribed
2023 and expects the company to sell 2,000 cars in 2023. The project forecast financial information is as follows: Selling price per Car(P) $ 200.000 The variable cost of goods sold (% of P) 75% Fixed operating costs $ 75,000,000 Interest expenses $ 900.000 Preference dividend $6 Marginal tax rate 30% Number of ordinary shares issued to finance this project 1,000.000 Number of preference shares issued to finance this project 100.000 a. What level of sales does Toyota need to achieve to break even with respect to operating income? b. At its operating breakeven point, what will be the EPS for Toyota? c. How many Cars (units) does Toyota needs to sell to attain the financial breakeven point? (Hint: An easy way to look at this problem is to consider how many units, beyond those needed to operate at the breakeven point, Toyota needs to sell to convert its fixed financial charges. d. Toyota expects only sales to be $400,000,000, what is its degree of operating leverage (DOL), degree of financial leverage (DFL), and degree of total (combined) leverage (DTL)? e. Compute the earnings per share you would expect. If sales turn out to be 90% of forecast sales in the year 2023. 4. Overall Performance (Findings and Conclusion) (10 marks) When you analyze Toyota annual report, what is your view on the overall financial health of Toyota, has it been impacted by the COVID-19 crisis? Please read the 2020 annual report and summarise your answer with clear evidence

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Volume 1

Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod Dick

7th Edition

1260306747, 978-1260306743

Students also viewed these Accounting questions

Question

B. Discuss the various ways in which reports should be precise.

Answered: 1 week ago

Question

When do you think a hiring decision will be made?

Answered: 1 week ago