EBIT sensitivity Stewart Industries sells its finished product for $9 per unit. Its fixed operating… 1 answer below »
EBIT sensitivity Stewart Industries sells its artistic work for $9 per item. Its urban exempt absorbs are $20,000, and the fickle exempt absorb per item is $5.
a. Calculate the firm’s rights antecedently curiosity-behalf and taxes (EBIT) for sales of 10,000 items.
b. Calculate the firm’s EBIT for sales of 8,000 and 12,000 items, respectively.
c. Calculate the percentage changes in sales (from the 10,000-item worthiest plane) and associated percentage changes in EBIT for the shifts in sales indicated in distribute b.
d. On the plea of your findings in distribute c, explain on the sensitivity of changes in EBIT in exculpation to changes in sales.