ovide for the higher price annu angsIdtl enjoyed ate degree? c. What explanation can you provide for the higher price by firm B as compared with firm A? a relatively new, o's Rocky Moun- Mini Cases These Mini Cases are available in MyFinanceLab. 1. Imagine that you were hired recently as a financial analyst for a relati... highly leveraged ski manufacturer located in the foothills of Colorado's Rock tains. Your firm manufactures only one product, a state-of-the-art snow s this point the company has been operating without much quantitative knowl the business and financial risks it faces. Ski season just ended, however, so the president of the company has started to in cus more on the financial aspects of managing the business. He has set up a meetin for next week with the CFO, Maria Sanchez, to discuss matters such as the business and financial risks faced by the company. Accordingly, Maria has asked you to prepare an analysis to assist her in her dis- cussions with the president. As a first step in your work, you compiled the following information regarding the cost structure of the company: Output level Operating assets Operating asset turnover Return on operating assets Degree of operating leverage Interest expense Marginal tax rate 80,000 units $4,000,000 8 times 32% 6 times $600,000 35% support As the next step, you need to determine the break-even point in units of output the company. One of your strong points has been that you always prepare sup ing work papers that show how you arrived at your conclusions. You know would like to see these work papers to facilitate her review of your work you will have the information you require to prepare an analytical income for the company. You are sure that Maria would also like to see this state addition, you know that you need it to be able to answer the following You also know Maria expects you to prepare, in a format that is prese president, answers to the following questions to serve as a basis for her with the president: a. What is the firm's break-even point in sales dollars? b. If sales should increase by 30 percent (as the president expects), centage would EBT (earnings before taxes) and net income increas c. Prepare another income statement, this time to verify the calcun part (b). You know Maria ur work. Therefore, income statement this statement. In Wing questions presentable to the for her discussions *pects), by what per come increase? calculations from