Question
Problem Set Question 1: The following information pertains to the Strawberry Shortcake Bhd chain: SalesRM600,000 Variable costs200,000 Total contribution margin400,000 Fixed costs150,000 EBIT250,000 Interest expense50,000
Problem Set
Question 1:
The following information pertains to the Strawberry Shortcake Bhd chain:
SalesRM600,000 Variable costs200,000 Total contribution margin400,000 Fixed costs150,000 EBIT250,000 Interest expense50,000 Earnings before taxes200,000 Taxes (30%)60,000 Net incomeRM140,000
Required:
a. What is the BEP(RM) for Strawberry Shortcake Bhd?
b. Calculate the degree of operating leverage at this level of output for Strawberry Shortcake Bhd.
c. Calculate the degree of financial leverage at this level of output for Strawberry Shortcake Bhd.
d. What is the combined leverage for Strawberry Shortcake Bhd?
e. If sales increase by 20%, what is the percentage increase in EBIT?
f. If sales increase by 10%, what will be Strawberry Shortcake Bhds EPS if the firm has 50,000 shares outstanding?
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Enterprise Risk Management Todays Leading Research And Best Practices For Tomorrows Executives
Authors: John R. S. Fraser, Rob Quail, Betty Simkins
1st Edition
1119741483, 978-1119741480
