Finance

Chapter 5 - direct and Financial Leverage 1. What is Leverage? Is it secure or detrimental to a flying? 2. What are heller simple decisions about leverage in a business line that mustiness be made by management? What is the of import trade-off that must be made in all(prenominal) of these two decisions? 3. What is operating leverage? What are the three main classes of be? What are some examples of these cost? 4. What is a part rim? 5. Given a Leveraged staunch that has mulish cost of $60,000, a unit of measurement price of $2, and changeable costs per unit of $0.80: What is the break-even bar? What is the lolly or issue at this measuring stick? 6. What is the return or loss for the Levered Firm if 20,000 units are interchange? 7. What is the profit or loss for the Levered Firm if 80,000 units are exchange? 8. A ultraconservative Firm chooses not to operate at high degrees of operating leverage by substituting to a greater extent overpriced variable costs for automated plant and equipment. This firm has fixed costs of $12,000, a unit price of $2, and variable costs per unit of $1.60: What is the break-even quantity? What is the profit or loss at this quantity? 9. What is the profit or loss for the traditionalist Firm if 20,000 units are sold? 10. What is the profit or loss for the right Firm if 80,000 units are sold? 11.

Given the undermentioned instruction: * Profit (Loss) = Units(P - VC) - FC * Leveraged Firm * Price = $2.00 per unitFC = $60,000 VC = $0.80 per unit * Conservative Firm * Price = $2.00 per unitFC =! $12,000 VC = $1.60 per unit * Which firm will strike the better financial action at sales levels of 20 thousand, 30 thousand, 50 thousand, and 80 thousand units? 12. What is cash break-even insight psychology? When is it useful? What types of items are include in account statement break-even analysis but excluded from cash break-even analysis? 13. What is Degree of Operating Leverage (DOL)? Does it matter where we start a DOL tally?...If you want to get a abundant essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay