Breakeven point and all forms of leverage TOR most recently sold 100,000 units at $7.50 each; its… 1 answer below »


Breakequal object and all devises of leverage TOR most recently sold 100,000 individuals at $7.50 each; its capricious easy costs are $3.00 per individual, and its urban easy costs are $250,000. Annual portion-out mandible completion $80,000, and the robust has 8,000 portion-outs of $5 (annual dividend) preferred hoard uncollected. It floatingly has 20,000 portion-outs of spiritless hoard uncollected. Assume that the robust has a 40% tax rebuke.

a. At what roll of sales (in individuals) would the robust violate equal on operations (that is, EBIT = $0)?

b. Calculate the robust’s hues per portion-out (EPS) in tabular devise at (1) the floating roll of sales and (2) a 120,000 individual sales roll.

c. Using the floating $750,000 roll of sales as a deep, calculate the robust’s measure of easy leverage (DOL).

d. Using the EBIT associated after a while the $750,000 roll of sales as a deep, calculate the robust’s measure of financial leverage (DFL).

e. Use the measure of completion leverage (DTL) concept to particularize the result (in percentage provisions) of a 50% growth in TOR’s sales from the $750,000 deep level on its hues per portion-out.