Zira Ltd sells mobile gadgets for 15 each. The gadgets have a variable cost of 4 per unit, and Products' fixed operating costs are 220,000 per year. Products' capital structure includes 55% debt and 45% equity. Annual interest expense is 25,000, and the tax rate is 35%.

Catrina Soft Drinks, Inc., sells 500,000 bottles of soft drinks a year. Each bottle produced has a variable cost of P0.25 and sells for P0.45. Fixed operating costs are P50,000. The company has current interest charges of P6,000 and preferred dividends of P2,400. The corporate tax rate is 40 percent. Calculate the degree of operating leverage, the degree of financial leverage, and the degree of total leverage. (choose the letter of the correct answer)a. Operating – 0.5, financial – 0.25 , total 1.0b. Operating – 1.0, financial – 0.75 , total 1.75c. Operating – 1.5, financial – 1.0 , total 2.5d. Operating – 1.5, financial – 0.25 , total 1.0e. Operating – 2.0, financial – 1.25 , total – 2.5

Zain glassware has made the forecast of sales shown in the following table. Also given is the probability of each level of sales.   Sales Probability Rs. 200,000 .20      300,000 .60      400,000 .20   The firm has fixed operating costs of Rs. 75,000 and variable operating costs equal to the 70% level of sales. The company pays Rs. 12,000 in interest per period. The tax rate is 40%. Compute the earnings before interest and taxes (EBIT) for each level of sales. Compute the earnings per share (EPS) for each level of sales, the expected EPS, the standard deviation of the EPS and the coefficient of variation of EPS, assuming that there are 10,000 shares of common stock outstanding. Zain glassware has the opportunity to reduce its leverage to zero and pay no interest. This will require that the number of shares of common stock outstanding be increased to 15,000. Repeat (b) under this assumption. Compare your findings in (b) and (c) and comment on the reduction…

Bonaventure Manufacturing expects to earn P210,000 next year after taxes. Sales will be P4million. The firm manufactures a combined bookshelf and desk unit used extensively in university dormitories. These units sell for P200 each and a have variable cost per unit of P150. Bonaventure experiences a 30% tax rate.a. Determine the firm’s fixed costs that are expected next year. (4 marks)b. Calculate the firm’s break-even point in both units and pulas.

LPM Corporation sells its product for $10 each. Fixed operating costs equal $100,000, and variable operating costs are 75 percent of the selling price. The firm pays $37,500 in interest, and its marginal tax rate is 35 percent. (a) What are LPM’s operating breakeven point and financial breakeven point? (b) If LPM expects to sell 65,000 units, what are its degree of operating leverage (DOL), degree of financial leverage (DFL), and degree of total leverage (DTL)? The firm has no preferred stock

The Warren Watch Company sells watches for $29, fixed costs are $180,000, and variable costs are $10 per watch. What is the firm's gain or loss at sales of 7,000 watches? Loss, if any, should be indicated by a minus sign. Round your answer to the nearest cent.$   What is the firm's gain or loss at sales of 15,000 watches? Loss, if any, should be indicated by a minus sign. Round your answer to the nearest cent.$     What is the break-even point (unit sales)? Round your answer to the nearest whole number.units

Sam Holdings is planning to open a new wholesaling operation. The target operating profit margin is 25%. The unit contribution margin will be 40% of sales. Average annual sales are forecast to be $4,250,000. The firm's total asset is $8,750,000 with debt-asset ratio of 40%. The firm pays 12% interest on the debt and has 100,000 common stocks. The firm is subjected to corporate tax rate of 28%. d. What is the degree of combined/total leverage (DCL/DTL)?

Stark Industries had sales of 150,000 units at a price of $10 per unit. It faced fixed operating costs of $250,000 and variable operating costs of $5 per unit. The company is subject to a tax rate of 38% and has a weighted average cost of capital of 8.5%. Calculate Stark Industries' net operating profits after taxes (NOPAT). Knowing that the value of the firm is calculated: NOPAT/WAAC; determine the value of Stark Industries.

Alexander Corporation sells its only product for $30 per unit. Its variable costs per unit are 40% of its selling price. Its total fixed costs for the year are $450,000. The company has an average income tax rate of 40 %. How many units must the company sell in order to earn an after tax profit of $360,000 ? Question 12 options: 45,000. 58,334. 1, 750, 020. 75,000.

Callie Corporation’s products sell for $180 each. The variable cost of each product is $135, and fixed operating costs are $371,250. Callie pays $61,875 interest on its outstanding debt each year, and its marginal tax rate is 40 percent. If Callie expects to sell 11,000 units, what is its degree of operating leverage (DOL), its degree of financial leverage (DFL), and its degree of total leverage (DTL)? The firm has no preferred stock.