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Parts of financial records for Company XYZ are: Anticipated sales = $400,000 Degree of financial leverage = 4/3 Variable cost = $200,000 Combined leverage effect

Parts of financial records for Company XYZ are:

Anticipated sales = $400,000

Degree of financial leverage = 4/3

Variable cost = $200,000

Combined leverage effect = 2

Quantity sold = $100,000 units

Profit margin = 5%

Total debt = $200,000

Leverage ratio = 1/2

Common stock outstanding = 10,000 shares

Current price per share = $40

Retention rate = 1/2

IRR = 8%

Calculate the following:

a) The total interest expense.

b) The total fixed cost.

c) The degree of operating leverage.

d) The break-even quantity.

e) The EAIT.

f) Total corporation income tax expense.

g) The return on net worth.

h) The return on total asset.

i) The EPS.

j) The P/E ratio for common stock.

k) The pay-out ratio for dividend.

l) The growth rate for the common stock.

m) The required rate of return.

n) Total asset turnover.

o) Analyze the financial situation of Company XYZ.

p) If the probablistic concepts are applied to break-evenanalysis, how should the analyses in (o) be revised?

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