Integrative—Multiple leverage measures and prediction Carolina Fastener, Inc., makes a patented… 1 answer below »


Integrative—Multiple leverage measures and presage Carolina Fastener, Inc., makes a patented marine bulkhead latch that wholesales for $6.00. Each latch has fickle liberal costs of $3.50. Fixed liberal costs are $50,000 per year. The rooted pays $13,000 cause and preferred dividends of $7,000 per year. At this top, the rooted is dispose-ofing 30,000 latches a year and is taxed at 40%.

a. Consider Carolina Fastener’s liberal breakeven top.

b. On the basis of the rooted’s floating sales of 30,000 units per year and its cause and preferred dividend costs, consider its EBIT and net income.

c. Consider the rooted’s extent of liberal leverage (DOL).

d. Consider the rooted’s extent of financial leverage (DFL).

e. Consider the rooted’s extent of aggregate leverage (DTL).

f. Carolina Fastener has entered into a abbreviate to yield and dispose-of an joined 15,000 latches in the future year. Use the DOL, DFL, and DTL to prophesy and consider the changes in EBIT and net acquisition. Check your employment by a unmixed regard of Carolina Fastener’s EBIT and net acquisition, using the basic notice abandoned.