Calculating leverage - If an output level is 14,000 units the degree of operating leverage= 1.45(round to 6 decimal places) , and the OCF= 19,600 but if:
a. output rises to 16,000 units the DOL will be ?
b. output falls to 13,500 units the DOL will be?
i did DOL= 1 + FC / OCF
1 + ? / 19,600 yet i do not know how to find the fixed costs.
for the same question ye...
Interest Rate Risk -
Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 5 years to maturity, wheareas Bond Dave has 12 years to maturity. If interest rates suddenly rise by 2 percent, the percentage change in the price of Bonds Sam and Dave is____ percent and ____ percent, respectively. (Input answers as a percent rounde...
Comparing Mutually Exclusive Projects - Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $1,910,000 and will last for 3 years. Variable costs are 38 percent of sales, and fixed costs are $139,000 per year. Machine B costs $4,390,000 and will last for 6 years. Variable costs for this machine are 32 percent and fixed costs are $79,000 per ...
Calculating Payback & Comparing Investment Criteria - I need help with question 3 and question 15.
(See attached file for full problem description)
Corporate FINANCE - Question 1:
Comparing Mutually Exclusive Projects
Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $1,910,000 and will last for 3 years. Variable costs are 38 percent of sales, and fixed costs are $139,000 per year. Machine B costs $4,390,000 and will last for 6 years. Variable costs for this machine are 32 perce...