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Question 2 Heat Inc. sells computer hard drives, and the market is competitive ( i . e . , sales price will not be affected
Question Heat Inc. sells computer hard drives, and the market is competitive ie sales price will not be affected by Heat's sales volume Its EBIT for was $ when the sales quantity was units. In its EBIT was $ when the sales quantity was units. a Calculate its contribution margin per unit and total fixed costs. b Calculate the degree of operating leverage for and c If Heat changes its production technology by doubling its fixed costs and the breakeven indifferent quantity is units, find the new contribution margin. Heat has $ debt that pays annual interest of and outstanding common shares that are trading at $ Its tax rate is d Calculate EPS for and e Calculate the degree of financial leverage for and f Calculate the degree of total leverage for and g Heat considers borrowing $ new debts that also pay interest to buy back common shares at current price of $ per share what is the breakeven indifferent sale quantity?
Question
Heat Inc. sells computer hard drives, and the market is competitive ie sales price will not be affected
by Heat's sales volume Its EBIT for was $ when the sales quantity was units. In
its EBIT was $ when the sales quantity was units.
a Calculate its contribution margin per unit and total fixed costs.
b Calculate the degree of operating leverage for and
c If Heat changes its production technology by doubling its fixed costs and the breakeven
indifferent quantity is units, find the new contribution margin.
Heat has $ debt that pays annual interest of and outstanding common shares that are
trading at $ Its tax rate is
d Calculate EPS for and
e Calculate the degree of financial leverage for and
f Calculate the degree of total leverage for and
g Heat considers borrowing $ new debts that also pay interest to buy back common
shares at current price of $ per share what is the breakeven indifferent sale quantity?
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