Question
company A and company B are both selling $2.3 million worth of goods . company A's pv ratio is 0.40 while company B's PV ratio
company A and company B are both selling $2.3 million worth of goods . company A's pv ratio is 0.40 while company B's PV ratio is 0.60 company B's fixed cost are 1 million dollar,which put the business at competitive disadvantage versus A.which has $ 500000 in fixed cost. questions.. 1) on the basis of above information ,if revenue were to increase by 20% for both business next year,how much profit before taxes would each generate ? 2) on the basis of above information ,if revenue were to decrease 20% for both next year,how much profit before taxes would each generate? 3) because of the varying cost structure, discuss the implications that the PV ratio has on both company's profit performance
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