Unit sales are expected to reach 30,000 per year, the price per unit is expected to be $90, variable costs are $40 per unit and fixed costs are $80,000 per year. The company pays $250,000 in interest per year.  What is the degree of financial leverage at the expected levels? Using the degree of financial leverage, what is the expected percentage change in earnings per share (EPS) if EBIT turns out to be 12% lower than expected?

If sales increase from P80.000 per year to P140,000 per year, and if the operating leverage factor is 5, then net operating income should increase by:

Your business plan for your proposed start-up firm envisions first-year revenues of $120,000, fixed costs of $30,000, and variable costs equal to one-third of revenue.a. What are expected profits based on these expectations?b. What is the degree of operating leverage based on the estimate of fixed costs and expected profits?c. If sales are 10% below expectation, what will be the decrease in profits?d. Show that the percentage decrease in profits equals DOL times the 10% drop in sales.e. Based on the DOL, what is the largest percentage shortfall in sales relative to original expectations that the firm can sustain before profits turn negative?f. What are break-even sales at this point?g. Confirm that your answer to (f) is correct by calculating profits at the break-even level of sales.

Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%?a. What are the projected sales in Years 1 and 2?b. What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? c. What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2?d. What is the projected FCF for Year 2?

A company projects a rate of return of 20% on new projects. Management plans to plow back 20% of all earnings into the firm. Earnings this year will be $6 per share, and investors expect a rate of return of 12% on stocks facing the same risks as this company. What is the sustainable growth rate? What is the stock price? What is the present value of growth opportunities (PVGO)? What is the P/E ratio? What would the price and P/E ratio be if the firm paid out all earnings as dividends? Please show workings with formulas.

Bulldogs Inc. currently has earnings before interest and taxes of P3,000,000, a degree of combined leverage of 8, and a degree of financial leverage of 2.  What will be Bulldogs Inc.'s expected earnings before interest and taxes in one year if sales decrease by 20% next year?

We are predicting for the end of this fiscal year: Skunk Products' EBIT is $1000, its tax rate is 35%, depreciation is $100, capital expenditures are $200, accounts receivable increase by $100, and accounts payable decrease by $100. What is the free cash flow to the firm? The FCFF will grow at 3%, WACC is 10%. What is the value of the company's assets? FCFF1 = $

Even Better Products has come out with an even better product. As a result, the firm projects an ROE of 20% and it will maintain a plowback ratio of 0.30. Its earnings this year will be $2 per share. Investors expect a 12% rate of return on the stock. a) At what price an dP/E ratio would you expect the firm to sell? b) What is the present value of growth opportunities?

MGL forecasted the following data for 2022 · Projected unit sales is 5,000 at a selling price of P65. · Variable cost ratio is 60% · Operating break-even point in sales is P250,000 · Earnings before taxes and interest is P30,000 · The P100,000 total debt of the firm requires annual payment of interest at 5%. What is the degree of combined leverage?

Bl Inc currently has earnings before interest and taxes of P3,000,000, a degree of combined leverage of 8, and a degree of financial leverage of 2. What will be the expected earnings before interest and taxes in one year if sales decrease by 20% next year?