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Need both answer in details. Assignment Exercise 3: You are the finance manager of a Salalah Goods Company and wants to make a decision calculating
Need both answer in details.
Assignment Exercise 3: You are the finance manager of a Salalah Goods Company and wants to make a decision calculating the financial leverage. Installed capacity = 10000 units Actual Production and sales =60% of the capacity Selling Price = OMR 50 per unit Variable cost= 20% of Sales Fixed cost: Under Situation 1 is OMR 25000 Under Situation 2 is OMR 30000 Capital Structure Plan A Plan B Equity OMR 10000 OMR 10000 Bonds 7.50% OMR 10000 Bank Loan 7.25% OMR 10000 a. Kindly suggest which alternative plan of financing is better and why? b. Explain how will the current situation of pandemic Covid-19, effect the company profitability, fixed cost, variable cost and EBIT? Suggest ways to overcome it? Assignment Exercise 4: You are the finance manager of a Salalah Goods Company and wants to make a decision calculating the financial leverage. Installed capacity = 8000 units Actual Production and sales =50% of the capacity Selling Price = OMR 40 per unit Variable cost= 20% of Sales Fixed cost: Under Situation 1 is OMR 20000 Under Situation 2 is OMR 25000 Capital Structure Plan A Plan B Equity OMR 10000 OMR 10000 Bonds 5.7% OMR 10000 Bank Loan 5.75% OMR 10000 a. Kindly suggest which alternative plan of financing is better and why? b. Explain how will the current situation of pandemic Covid-19, effect the company profitability, fixed cost, variable cost and EBIT? Suggest ways to overcome itStep by Step Solution
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