1. A company produces shirts and sells them on average for $40 with a unit contribution margin of 32%. If the total fixed costs are $300,000:
2. What is the breakeven point?
3. How many units must be sold to earn $95,000?

 

 

1. The company La Pepita Dorada produces 780,000 monthly units of an item that is sold at $21.50 each, which leaves a profit after taxes (t=30%) of $2 million. If you have the necessary spare capacity and your fixed costs are $3.35 million per month, would you accept an additional order of 120,000 units that offer to pay you $18.50 each? What would be the reason?

 

1. Company A sells 188 units at a price of $2.5 per unit. The variable cost per Unit is $1.75 and it records total fixed costs of $63.
2. Calculate the break-even point in units and in value for firm A.
3. Suppose the company wants to make a profit of $35.
4. Calculate the necessary level of sales in value and units required, to achieve said profit.

 

 

1. Firms A, B and C record the results presented in the...

Firms A, B and C record the results presented in the following table. Calculate for each company the ROIC (%) and FCF = NOPAT - i. Assume that the WACC is 12.5% and that the amount of capital invested in each company is $1,200 in company A, $900 in company B, and $700 in company C.

 

	A	B	C
NOPAT ($)	200	200	200
growth rate (g)	8%	12%	18%
Net investment/NOPAT	90%	80%	25%
Net investment ($)	$180	$160	$50
Increase in NOPAT ($)	$16	$24	$36