5 P 2 Problem 11-27A (Algo) Analyzing operating leverage LO 11-3, 11-4 Amold Vimica is a venture capitalist facing two alternative investment opportunities. He intends to invest $1 milion in a start-up firm. He is nervous, however about future economic volatility. He asks you to analyze the following financial data for the past year's operations of the two firms he is considering and give him some business advice Variable cost per unit (A) Jaise revance (0.103 nite $30.00 Variable cost (100) Contribution margin Net inco 243,000 243,000 364,400 14,400 Required a. Use the contribution margin approach to compute the operating leverage for each firm. b. If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remayes unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Not Since the number ofbits increases, both revenue and variable cost will increase) c. If the economy contracts in coming years, Larson and Benson will both suffer a 12 percent decrease in sales volume, assuming that the seling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage (Note Since the number of units decreases, both total revenue and total variable cost will decrease) Complete this question by entering your answers in the tabs below. Required A Required B Required C If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will increase) (Round "Percentage" answer to 2 decimal place (1.e, 2345 should be entered as 23.45). Round final answers to nearest whole dollar) Show less eBook Print References Complete this question by entering your answers in the tabs below. Required A Required B Required C If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will increase.) (Round "Percentage" answer to 2 decimal place (ie., 2345 should be entered as 23.45). Round final answers to nearest whole dollar.) Show less Company Name Larson Benson Variable cost per unit S 19.00 $ 9.50 Sales revenue 153.900 Variable cost Contribution margin Fixed cost Not Income Percentage change S Since the number of units decreases, both total revenue and total variable cost will decrease) eBook 14 References Complete this question by entering your answers in the tabs below. Required A Required RequireC If the economy contracts in coming years, Larson and Benson will both suffer a 12 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage (Note: Since the number of units decreases, both total revenue and total variable cost will decrease.) (Round "Percentage answer to 2 decimal place (ie., 2345 should be entered as 23.45). Round final answers to nearest whole dollar.) Company Name Larson Benson Variable cost per unit $ 19.00 9.50 Sales revenue 213.840 213.840 Variable cost 135,432 67,716 Contribution margin 78.408 146.124 Fixed cost Net income Percentage change % Required B ezto.mheducation.com/ext/map/index.html?_con-con&external browser=0&launchUrl https%253A%252F%252Fims.mheducation.com%252Fmghmiddleware%252Fmheproducts%252Flms.. Translate Maps Apps + Topic: CW | Argu.. News YouTube Mi Gmail Google Slides Mc Graw Hill 2 5 points j Print References Saved Problem 11-27A (Algo) Analyzing operating leverage LO 11-3, 11-4 Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1 million in a start-up firm. He is nervous, however, about future economic volatility. He asks you to analyze the following financial data for the past year's operations of the two firms he is considering and give him some business advice. Variable cost per unit (a) Sales revenue (8,100 units Variable cost (8,100 unite Contribution margin Fixed cost Bet Income Required Company Mane Larson $30.00) a 243,000 243,000 (153,900) 76,950) 09,100 (24,700) $64,400 166,050 103,650) 64,400 a. Use the contribution margin approach to compute the operating leverage for each firm b. If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note Since the number of units increases, both revenue and variable cost will increase.) If the economy contracts in coming years, Larson and Benson will both suffer a 12 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note Since the number of units decreases, both total revenue and total variable cost will decrease.) Complete this question by entering your answers in the tabs below. Required A Required Required C If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will increase.) (Round "Percentage" answer to 2 decimal place (ie, 2345 should be entered as 23.45). Round final answers to nearest whole dollar.) Show less A < Prev 2 of 3 Next > Hell ezto.mheducation.com/ext/map/index.html?_con-con&external browser=0&launchUrl https%253A%252F%252Fims.mheducation.com%252Fmghmiddleware%252Fmheproducts%252Flms.. News Translate Maps YouTube Mi Gmail Apps + Topic: CW | Argu.. Google Slides Ch 11 HWI 5 2 points a. Use the contribution margin approach to compute the operating leverage for each firm. b. If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note Since the number of units increases, both revenue and variable cost will increase.) c. If the economy contracts in coming years, Larson and Benson will both suffer a 12 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note Since the number of units decreases, both total revenue and total variable cost will decrease.) ebook Complete this question by entering your answers in the tabs below. Print References Required A Required B Required C If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will increase.) (Round "Percentage" answer to 2 decimal place (ie, 2345 should be entered as 23.45), Round final answers to nearest whole dollar) Mc Graw Hill Company Name Larson Benson Variable cost per unit $ Sales revenue 10.00 135,432 9.50 Variable cost Contribution margin Fixed cost Net income Percentage change Required A Required C > < Prev 2 of 3 Next > Hell ezto.mheducation.com/ext/map/index.html?_con-con&external browser=0&launchUrl https%253A%252F%252Fims.mheducation.com%252Fmghmiddleware%252Fmheproducts%252Flms.. News Translate Maps YouTube Mi Gmail Apps + Topic: CW | Argu.. Google Slides Ch 11 HWI 5 2 points a. Use the contribution margin approach to compute the operating leverage for each firm. b. If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note Since the number of units increases, both revenue and variable cost will increase.) c. If the economy contracts in coming years, Larson and Benson will both suffer a 12 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note Since the number of units decreases, both total revenue and total variable cost will decrease.) ebook Complete this question by entering your answers in the tabs below. Print References Required A Required B Required C If the economy contracts in coming years, Larson and Benson will both suffer a 12 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units decreases, both total revenue and total variable cost will decrease.) (Round "Percentage answer to 2 decimal place (ie, 2345 should be entered as 23.45). Round final answers to nearest whole dollar) Mc Graw Hill Company Name Larson Benson Variable cost per unit Sales revenue 10.00 213,840 9.50 213,640 Variable cost 135,432 67,716 Contribution margin 78,408 146.124 Fixed cost Net income Percentage change Hell