questions 2-5

(DOL) 131 (DCL) 139 DISCUSSION QUESTIONS 1. Discuss the various uses for break-even analysis. (LO5-2) 2. What factors would cause a difference in the use of financial leverage for a utility company and an automobile company? (LO5-1) 3. Explain how the break-even point and operating leverage are affected by the choice of manufacturing facilities (labor intensive versus capital intensive). (LO5-2) 4. What role does depreciation play in break-even analysis based on accounting flows? Based on cash flows? Which perspective is longer term in nature? (LO5-2) 5. What does risk taking have to do wit of operating and financial lever- age? (LO5-6) 6. Discuss the limitations of financial ieverage. (LOS-4) 7. How does the interest rate on new debt influence the use of financial leverage? 8. Explain how combined leverage brings together operating income and earnings 9. Explain why operating leverage decreases as a company increases sales and 10. When you are considering two different financing plans, does being at the level (LO5-4) per share. (LO5-5) shifts away from the break-even point. (LO5-3)