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Hello I need the answers for all this questions pls Thanks have a good day Wingler Communications Corporation (WCC) produces airpods that sell for $28.70
Hello I need the answers for all this questions pls
Wingler Communications Corporation (WCC) produces airpods that sell for $28.70 per set, and this yoar's sales are expected to be 450,000 units. Variable preduction fosts for the expected sales under present production methods are estimated at $10,300,000, and fixed production (operating) costs at present are 51,560,000. wCC has $4,800,000 of deqt outstand ng at an interest rate of 9%. There are 240,000 shares of common stock outstanding, and there is no preferred stock. The dividend payout ratio is 70%, and wce is in the 25% ferieral-plusistate tax bracket. WCC is a small company with average sales of $25 milion or less during the past 3 years, so it is exempt from the interest deduction limitation. The company is considering investing $7,200,000 in new equipment. Sales would not increase, but variable costs per unit would decline by 20%. Aso, fixed operating costs would increase from $1,560,000 to $1,800,000, wCC could ralse the required capital by borrowing $7,200,000 at 1006 or by selling 240,000 additional shares of common stock at $35 per share. a. What would be wCC's EPS (1) under the old production process, (2) under the new process if it uses debt, and (3) under the new process if it uses corrmon stock? Doo not raund intermediate calculations. Round your answers to the nearest cent. 1. 5 2. 5 3. 5 b. At what unit sales level would wCC have the same EPS Tassuming it undertakes the investment and finances it with debt or with stock? (Hint: V= variable cost per unit = $8,240,000/450,000, and EFS = [(PQ - VQ FI)(1T)]/N. Set EPSSiock - EPSorat and solve for Q.) Do not round intermediate calculations. Round your answer to the nearest whole number. c. At what unit sales level would EPS = 0 under the three production/financing setups - that is, under the old plan, the new plan with debt financing, and the new plan with stock financing? (Hint: Note that Void =$10,300,000/450,000, and use the hints for part b, setting the EPS equation equal to zero.) Do not round intermediate calculations, Round your answers te the nearest whole number. Ole plan: units New pian with debt financing: units New plan with stock financing: unies d. On the basis of the analysis in parts o through c, and given that operating leverage is lower under the new setup, which plan is the riskiest, which has the highest eqpected Eas, and which would you recommend? Assume that there is a fairly high probability of sales falling as low as 250,000 units. Determine EPSceef and EPSstock at that sales ievel to helo assess the riskiness of the two financing plans. Negative values shoudd be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the neare te cent. EPSoeby 15 EpSstocat s Wingler Communications Corporation (WCC) produces airpods that sell for $28.70 per set, and this yoar's sales are expected to be 450,000 units. Variable preduction fosts for the expected sales under present production methods are estimated at $10,300,000, and fixed production (operating) costs at present are 51,560,000. wCC has $4,800,000 of deqt outstand ng at an interest rate of 9%. There are 240,000 shares of common stock outstanding, and there is no preferred stock. The dividend payout ratio is 70%, and wce is in the 25% ferieral-plusistate tax bracket. WCC is a small company with average sales of $25 milion or less during the past 3 years, so it is exempt from the interest deduction limitation. The company is considering investing $7,200,000 in new equipment. Sales would not increase, but variable costs per unit would decline by 20%. Aso, fixed operating costs would increase from $1,560,000 to $1,800,000, wCC could ralse the required capital by borrowing $7,200,000 at 1006 or by selling 240,000 additional shares of common stock at $35 per share. a. What would be wCC's EPS (1) under the old production process, (2) under the new process if it uses debt, and (3) under the new process if it uses corrmon stock? Doo not raund intermediate calculations. Round your answers to the nearest cent. 1. 5 2. 5 3. 5 b. At what unit sales level would wCC have the same EPS Tassuming it undertakes the investment and finances it with debt or with stock? (Hint: V= variable cost per unit = $8,240,000/450,000, and EFS = [(PQ - VQ FI)(1T)]/N. Set EPSSiock - EPSorat and solve for Q.) Do not round intermediate calculations. Round your answer to the nearest whole number. c. At what unit sales level would EPS = 0 under the three production/financing setups - that is, under the old plan, the new plan with debt financing, and the new plan with stock financing? (Hint: Note that Void =$10,300,000/450,000, and use the hints for part b, setting the EPS equation equal to zero.) Do not round intermediate calculations, Round your answers te the nearest whole number. Ole plan: units New pian with debt financing: units New plan with stock financing: unies d. On the basis of the analysis in parts o through c, and given that operating leverage is lower under the new setup, which plan is the riskiest, which has the highest eqpected Eas, and which would you recommend? Assume that there is a fairly high probability of sales falling as low as 250,000 units. Determine EPSceef and EPSstock at that sales ievel to helo assess the riskiness of the two financing plans. Negative values shoudd be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the neare te cent. EPSoeby 15 EpSstocat s Thanks have a good day
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