Question
In: Finance
Putih Berhad sells small kitchen gadgets for RM15 each. The gadgets have a variable cost of...
Putih Berhad sells small kitchen gadgets for RM15 each. The
gadgets have a variable cost of RM4 per unit, and Putih Berhad
fixed operating costs are RM220,000 per year. Putih Berhad capital
structure includes 55% debt and 45% equity. Annual interest expense
is RM25,000 and the corporate tax rate is 35%.
Required:
a) Calculate the break-even point in units
b) If Putih Berhad sells 25,000 units, calculate the firm's
EBIT and net income.
c) If sales increase 20% from 25,000 units to 30,000 units,
estimate the firm's expected EBIT and net income.
d) Does Putih Berhad use operating leverage and/or financial
leverage? Explain.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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