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PARTI: Numerical Task: Using Exhibits 1, 2 and 3 showing the projected unit sales, as well as the other financials of two comparable companies operating

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PARTI: Numerical Task: Using Exhibits 1, 2 and 3 showing the projected unit sales, as well as the other financials of two comparable companies operating in the same industry, answer the questions: EXHIBIT 1: Unit Sales Estimates for Alpha plc and Beta pla Company 2017 Unit Sales Standard Deviation of Unit Sales Alpha plc 1,000,000 25,000 Beta pls 1,500,000 10,000 2018 Expected Unit Sales Growth Rate (%). 15 15 EXHIBIT 2: Sales. Cost and Expense Data for Alpha pls (At Unit Sales of 1,000,000) Number of units produced and sold 1,000,000 Sales, price per unit. 108 Variable cost per unit 72 Fixed operating cost 22,500,000 Fixed financing expense 9,000,000 EXHIBIT 3: Selected Financial Data on Beta pls (At Unit Sales of 1,500,000) Degree of operating leverage 1.40 Degree of financial leverage 1.15 Breakeven quantity.(units) 571,429 EI a) Based on the data. Alpba's.sales risk relative to Beta's is most likely to be: A) bigber B) bewer C) equal. Justify your choice. Justify your choice: b) Based on the information in Exbibit 2, calculate the degree of operating leverage of Alpha plo, at unit sales of 1,000,000. (show detailed calculations): Interpret the coefficient: c) Based on the information in Exhibit 2, calculate the degree of financial leverage of Alpha plo. at unit sales of 1,000,000. d) (show detailed calculations): Interpret the coefficient: M e) Based on the information in Exbibit 2, calculate the degree of total leverage of Alpha plc at unit sales of 1,000,000 (show detailed calculations): e) Based on the information in Exbibit 2. calculate the degree of totalleverage of Alpha plc. at unit sales, of 1,000,000. (show detailed calculations): Interpret the coefficient: f) Based on the information in Exhibit 1 and Exhibit 3, calculate Beta's expected percentage change to operating income for 2018. g) Scalculate Alpha's breakeven quantity of sales. What does this measure indicate? h) It is most likely that Alpha's, net income will increase at: A) a slower rate than Beta's B) the same cate, as Beta's C) a faster rate than Beta's I Justify your choice

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