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Temka [501]
2 years ago
11

Firms in Japan often employ both high operating and financial leverage because of the use of modern technology and close borrowe

r–lender relationships. Assume the Mitaka Company has a sales volume of 150,000 units at a price of $30 per unit; variable costs are $7 per unit, and fixed costs are $2,050,000. Interest expense is $425,000. What is the degree of combined leverage for this Japanese firm? (Round your answer to 2 decimal places.)
Business
1 answer:
tekilochka [14]2 years ago
3 0

Answer:

combined degree: 3,5385

Explanation:

degree of operating leverage:

\frac{contribution}{EBT}

contribution: Q (sales - variable cost)

150,000 x (30 - 7) = 150,000 x 23 = <u>3,450,000</u>

EBT =  contribution - fixed cost - interest expense

 3,450,000 - 2,050,000 - 425,000 = <u>975,000</u>

\frac{contribution}{EBT}

\frac{3,450,000}{975,000}

combined degree: 3,5385

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zzz [600]

Answer:

correct option is a. average total cost and average fixed cost.

Explanation:

given data

license fee  = $1,000 per year

solution

we know that cost curves shift will be express as when the increase in the price of factor of production increase cost and shift cost curves upward

so cost curves shift by the average total cost and the average fixed cost

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3 0
2 years ago
Beverly Hills started a paper route on January 1. Every three months, she deposits $550 in her bank account, which earns 8 perce
aleksandrvk [35]

Answer:

Total amount= $12,558.68

Explanation:

Giving the following information:

Every three months, she deposits $550 in her bank account, which earns 8 percent annually but is compounded quarterly Four years later, she used the entire balance in her bank account to invest in an investment at 7 percent annually.

First, we need to calculate the total accumulated money after four years with the following formula.

FV= {A*[(1+i)^n-1]}/i

A= deposit= 550

N= 16

i=0.08/4= 0.02

FV= {550*[(1.02^16)-1]}/0.02= 10,251.61

Now, we calculate the second investment:

FV= PV*(1+i)^n= 10,251.62*(1.07^3)= $12,558.68

6 0
2 years ago
Summers, Inc., has net income of $50 million in the current year. Stockholders’ equity at the beginning and the end of the curre
vovikov84 [41]

Answer:

ROE = 33.33%

Explanation:

<em><u>return on equity:</u></em>

\frac{income}{average \: equity}

<em><u>where:</u></em>

Average equity

$$(beginning + ending equity) \div 2

(140 + 160) / 2 = 150

return on equity : 50 / 150 = 1/3 = 0.3333 = 33.33%

The ROE measures the effectiveness of the managers to generate profit with their current net assets(equity)

This ROE of 33.33% rrepresent that for every dollar of equity the company generates 33 cents of income

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A money market account is the type of account is most suitable for Sofia’s needs.

A money market account earns interest on the money that is deposited at a higher rate than a normal savings account. Even though this is not a common savings account, the account holder is able to write checks from the account if the money needs to be accessed. A money market account is a 'best of both worlds' account because the holder can benefit like a savings and checking account would allow (with some restrictions).

3 0
2 years ago
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