how do i slove questions 7

6 250,000 x 200) = 30,000 I bodo 2oyees EBIT - S-vcfc = 825 - 300-2004325 150 325-250000301 250 18 18.00 = 9 9-6.75 2 Leverages - Problem Set Problem Question 1 6.73 Use the income statement of ABC Company below to answer the following questions. All amounts are in thousands of Dirhams. 750,000 $101.750000 Sales (50,000 units at 15) 750. Variable costs (50.000 units at 6) Sales 750x151= 825,000 300 Contribution margin 450 Fixed costs 200 EBIT 250 Interest 100 Tax (10%) EAT 135 Number of shares outstanding 20,000 5) 750,000 xlolm 169750-26 EPS Sales = 797,500 20,000 V1, Calculate the degree of operating leverage. Explain what your answer means. 2. Calculate the degree of financial leverage. Explain what your answer means. 7 . Calculate the degree of combined leverage. Use the answers from questions 1-3 to help you answer questions 4-7. 4. If the sales volume increased by 10% by how much would the EBIT increase? Give your answer in percentage and in Dirhams. 5/ If the sales volume increased by 5% by how much would EPS increase? Give your answer in percentage and in Dirhams. 6. If the EBIT increased by 20%, by how much would EPS increase? Give you answer in percentage and Dirhams The sales manager would like to increase net income by 30%. What percentage change in sales is required to achieve this goal? 8.495-675-1.60 1-682-015 =gree Degree of financial leverage of operating leverage (2) EBIT EBIT = 250 EBT= 150 = Confirbution EBT 250 = 1.667 I SO action LEBT by H. will bring chanje i 6) 250/COK 201) = 309000 loco 2 yere 1oeco cee = 90 9-6-75 = 33.33% 29 9-6.73 Leverages - Problem Set Problem Question 1 6.75 Use the income statement of ABC Company below to answer the following questions. All amounts are in thousands of Dirhams. 750,000 JO175400 Sales (50,000 units at 15) Variable costs (50,000 units at 6) Sales 750x18!= 825,000 Contribution margin Fixed costs = 925 - 300-2000323 I. EBIT EBIT: S-VC + 325-190 20 159 135 5) 750,000 .01 g 169750-es Interest 100 EBT Tax (10%) 2.90 EAT Number of shares outstanding 20,000 EPS 6.75 Sedes = 787,500 20,000 V1, Calculate the degree of operating leverage. Explain what your answer means. . 2. Calculate the degree of financial leverage. Explain what your answer means. Calculate the degree of combined leverage. Use the answers from questions 1-3 to help you answer questions 4-7. 4. If the sales volume increased by 10% by how much would the EBIT increase? Give your answer in percentage and in Dirhams. If the sales volume increased by 5% by how much would EPS increase? Give your answer in percentage and in Dirhams. . If the EBIT increased by 20%, by how much would EPS increase? Give you answer in percentage and Dirhams 7 The sales manager would like to increase net income by 30%. What percentage change in sales is required to achieve this goal? 3.495-675-681 1-2-0-25=254 250 = 1.667 Degree of financial leverage 1- degree of operating leverage. (2) EBIT - EBIT = 250 EBT = 150 = BT Confirbution EBIT Value given in question LEBT by H. will bring change in EBT confirbution : 450 Combined leverage DOLX DIL EBIT = 250 Sortirbution