Use the following information to answer the Q1 and Q2: Price Per Unit Units Sold Variable Costs Fixed Costs Company A $30 100,000 20% a) Company A bl Company B $800,000 a) Company A: 1.88, Company B: 2.14 b) Company A: 1.50, Company B: 1.29 c) Company A: 1.71, Company B: 1.13 d) Company A: 1.25, Company B: 1.67 Company B $30 100,000 40% Q1. What is the degree of operating leverage for Company A and Company B? (Round to two decimal places) $400,000 Q2. The IMF just released its global growth forecast for next year of 5.5%. What firm is likely to perform better under this scenario?

Use the following information to answer the Q1 and Q2: Price Per Unit Units Sold Variable Costs Fixed Costs Company A $30 100,000 20% a) Company A bl Company B $800,000 a) Company A: 1.88, Company B: 2.14 b) Company A: 1.50, Company B: 1.29 c) Company A: 1.71, Company B: 1.13 d) Company A: 1.25, Company B: 1.67 Company B $30 100,000 40% Q1. What is the degree of operating leverage for Company A and Company B? (Round to two decimal places) $400,000 Q2. The IMF just released its global growth forecast for next year of 5.5%. What firm is likely to perform better under this scenario?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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