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Hi, I need help understanding this in excel. Please use numbers and not cell references if possible. Question 4: You have been provided with the
Hi,
I need help understanding this in excel. Please use numbers and not cell references if possible.
| Question 4: | |||
| You have been provided with the following information about a company (for a full financial year), which manufactures and sells only one product: | |||
| Sales price per unit ($) | 16,6 | ||
| Variable cost per unit ($) | 7,7 | ||
| Fixed cost ($) | 20 300 | ||
| Number of units produced | 5 550 | ||
| Equity Capital ($) | 600 000 | ||
| Debt ($) | 200 000 | ||
| Annual Interest on Debt ($) | 7,50% | ||
| Tax Rate | 25,00% | ||
| (a) Calculate the Break Even Point for this company in number of units and in revenues ($s). | |||
| (b) Calculate the Operating Leverage, Financial Leverage and Combined Leverage of this company (at the level of operation provided above). | |||
| (c) Using your calculations above, and everything else staying the same, how much would you expect the EPS of the company increase (in %) if the company manages to sell 800 more units the next year? | |||
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