2. Change all of the numbers in the data area of your worksheet so that it looks like this: If your formulas are correct, you should get the correct answers to the following questions.
|
A |
B |
C |
D |
|
| 1 | Chapter 5: Applying Excel | |||
| 2 | ||||
| 3 | Data | |||
| 4 | Unit sales | 80,000 | units | |
| 5 | Selling price per unit | $20 | per unit | |
| 6 | Variable expenses per unit | $14 | per unit | |
| 7 | Fixed expenses | $384,000 | ||
| 8 |
(a) What is the break-even in dollar sales?
(b) What is the margin of safety percentage?
(c) What is the degree of operating leverage? (Round your answer to 2 decimal places.)
3. Using the degree of operating leverage and without changing anything in your worksheet, calculate the percentage change in net operating income if unit sales increase by 20%.
4. Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20% so that the Data area looks like this:
|
A |
B |
C |
D |
|
| 1 | Chapter 5: Applying Excel | |||
| 2 | ||||
| 3 | Data | |||
| 4 | Unit sales | 96,000 | units | |
| 5 | Selling price per unit | $20 | per unit | |
| 6 | Variable expenses per unit | $14 | per unit | |
| 7 | Fixed expenses | $384,000 | ||
| 8 |
(a) What is net operating income? (Negative amount should be indicated by a minus sign.)
(b) By what percentage did the net operating income increase?
5. Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that was popular in the 1930s. The retro-look cycle would be sold for $14,000 and at that price, Thad estimates 500 units would be sold each year. The variable cost to produce and sell the cycles would be $9,800 per unit. The annual fixed cost would be $1,575,000.
a. What is the break-even in unit sales?
b. What is the margin of safety in dollars?
c. What is the degree of operating leverage? (Round your answer to 2 decimal places.)
Thad is worried about the selling price. Rumors are circulating that other retro brands of cycles may be revived. If so, the selling price for the Western Hombre would have to be reduced to $11,800 to compete effectively. In that event, Thad would also reduce fixed expenses to $1,434,000 by reducing advertising expenses, but he still hopes to sell 500 units per year.
d. What would the net operating income be in this situation? (Negative amount should be indicated by a minus sign.)
In: Accounting
2. Change all of the numbers in the data area of your worksheet so that it looks like this:
|
A |
B |
C |
D |
|
| 1 | Chapter 3: Applying Excel | |||
| 2 | ||||
| 3 | Data | |||
| 4 | Unit sales | 30,000 | units | |
| 5 | Selling price per unit | $50 | per unit | |
| 6 | Variable expenses per unit | $20 | per unit | |
| 7 | Fixed expenses | $720,000 | ||
| 8 |
If your formulas are correct, you should get the correct answers to the following questions.
(a) What is the break-even in dollar sales?
(b) What is the margin of safety percentage?
(c) What is the degree of operating leverage? (Round your answer to 2 decimal places.)
3. Using the degree of operating leverage and without changing anything in your worksheet, calculate the percentage change in net operating income if unit sales increase by 20%.
4. Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20% so that the Data area looks like this:
|
A |
B |
C |
D |
|
| 1 | Chapter 3: Applying Excel | |||
| 2 | ||||
| 3 | Data | |||
| 4 | Unit sales | 36,000 | units | |
| 5 | Selling price per unit | $50 | per unit | |
| 6 | Variable expenses per unit | $20 | per unit | |
| 7 | Fixed expenses | $720,000 | ||
| 8 |
(a) What is net operating income? (Negative amount should be indicated by a minus sign.)
(b) By what percentage did the net operating income increase?
5. Thad Morgan, a motorcycle enthusiast, has been exploring the
possibility of relaunching the Western Hombre brand of cycle that
was popular in the 1930s. The retro-look cycle would be sold for
$17,000 and at that price, Thad estimates 600 units would be sold
each year. The variable cost to produce and sell the cycles would
be $12,750 per unit. The annual fixed cost would be
$2,040,000.
a. What is the break-even in unit sales?
b. What is the margin of safety in dollars?
c. What is the degree of operating leverage? (Round your answer to 2 decimal places.)
Thad is worried about the selling price. Rumors are circulating
that other retro brands of cycles may be revived. If so, the
selling price for the Western Hombre would have to be reduced to
$14,200 to compete effectively. In that event, Thad would also
reduce fixed expenses to $1,551,000 by reducing advertising
expenses, but he still hopes to sell 600 units per year.
d. What would the net operating income be in this situation? (Negative amount should be indicated by a minus sign.)
In: Accounting
|
A |
B |
C |
D |
|
| 1 | Chapter 5: Applying Excel | |||
| 2 | ||||
| 3 | Data | |||
| 4 | Unit sales | 30,000 | units | |
| 5 | Selling price per unit | $70 | per unit | |
| 6 | Variable expenses per unit | $42 | per unit | |
| 7 | Fixed expenses | $420,000 | ||
| 8 |
|
|
If your formulas are correct, you should get the correct answers to the following questions. |
| (a) | What is the break-even in dollar sales? |
| (b) |
What is the margin of safety percentage? |
| (c) |
What is the degree of operating leverage? (Round your answer to 2 decimal places.) |
| 3. |
Using the degree of operating leverage and without changing anything in your worksheet, calculate the percentage change in net operating income if unit sales increase by 20%. |
| 4. |
Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20% so that the Data area looks like this: |
||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||
| (a) |
What is net operating income? (Negative amount should be indicated by a minus sign.) |
| (b) |
By what percentage did the net operating income increase? |
| 5. |
Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that was popular in the 1930s. The retro-look cycle would be sold for $17,000 and at that price, Thad estimates 400 units would be sold each year. The variable cost to produce and sell the cycles would be $13,600 per unit. The annual fixed cost would be $1,224,000. |
| a. | What is the break-even in unit sales? |
| b. |
What is the margin of safety in dollars? |
| c. | What is the degree of operating leverage? (Round your answer to 2 decimal places.) |
| Thad is worried about the selling price. Rumors are circulating that other retro brands of cycles may be revived. If so, the selling price for the Western Hombre would have to be reduced to $14,200 to compete effectively. In that event, Thad would also reduce fixed expenses to $1,139,000 by reducing advertising expenses, but he still hopes to sell 400 units per year. |
| d. | What would the net operating income be in this situation? (Negative amount should be indicated by a minus sign.) |
In: Accounting
2. Change all of the numbers in the data area of your worksheet so that it looks like this:
|
If your formulas are correct, you should get the correct answers to the following questions.
(a) What is the break-even in dollar sales?
(b) What is the margin of safety percentage?
(c) What is the degree of operating leverage? (Round your answer to 2 decimal places.)
3. Using the degree of operating leverage and without changing anything in your worksheet, calculate the percentage change in net operating income if unit sales increase by 20%.
4. Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20% so that the Data area looks like this:
A
B
C
1
2
3
4
5
6
7
| Chapter 5: Applying Excel | ||
| Data | ||
| Unit sales | 60,000 | units |
| Selling price per unit | $20 | per unit |
| Variable expenses per unit | $14 | per unit |
| Fixed expenses | $270,000 |
(a) What is net operating income? (Negative amount should be indicated by a minus sign.)
(b) By what percentage did the net operating income increase?
5. Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that was popular in the 1930s. The retro-look cycle would be sold for $13,000 and at that price, Thad estimates 200 units would be sold each year. The variable cost to produce and sell the cycles would be $9,100 per unit. The annual fixed cost would be $390,000.
a. What is the break-even in unit sales?
b. What is the margin of safety in dollars?
c. What is the degree of operating leverage? (Round your answer to 2 decimal places.)
Thad is worried about the selling price. Rumors are circulating that other retro brands of cycles may be revived. If so, the selling price for the Western Hombre would have to be reduced to $10,500 to compete effectively. In that event, Thad would also reduce fixed expenses to $363,000 by reducing advertising expenses, but he still hopes to sell 200 units per year.
d. What would the net operating income be in this situation? (Negative amount should be indicated by a minus sign.)
In: Accounting
An Issue of Treasury Bills matures in 346 days. If the annual interest rate r is 5%, find the ask yield. Express your answer as a percentage with 3 digits after the decimal point. Do not include % sign.
An issue of treasury bills matures in 175 days. Its straight yield is 6.4%. Please, find the annual interest rate r. Express your answer as a percentage with 3 digits after the decimal point. Do not include % sign.
In: Finance
Assume that your brokerage company requires an initial margin of 60% and a maintenance margin of 35%. Assume further that you short 800 shares of Jellyfish Corp. at $40 per share and the price increases to $56.
a. Calculate your percentage loss based on your current and initial equity.
b. Calculate the percentage change in the value of the stock.
c. Show the account balance sheet if you use funds from your account to buy securities and decrease the loan.
In: Finance
According to your personal analysis, the expected return of UBER should be 15.6%. However, this is not necessarily what the CAPM is saying. The expected return on the market is 12%, the risk-free rate is 1.9%, and the beta for UBER is 1.11.
You want to exploit the mispricing using an arbitrage portfolio and the recipe from the book. Give the weight in the risk-free asset in percentage.
{Give your answer as a percentage with 2 decimals, e.g., if the answer is 0.345224 (or 34.5224%) , enter 34.52 as your answer.}
In: Finance
According to your personal analysis, the expected return of NFLX should be 8.9%. However, this is not necessarily what the CAPM is saying. The expected return on the market is 11.5%, the risk-free rate is 1.4%, and the beta for NFLX is 1.14.
You want to exploit the mispricing using an arbitrage portfolio and the recipe from the book. Give the weight in the risk-free asset in percentage.
{Give your answer as a percentage with 2 decimals, e.g., if the answer is 0.345224 (or 34.5224%) , enter 34.52 as your answer.}
In: Finance
According to your personal analysis, the expected return of UBER should be 15.2%. However, this is not necessarily what the CAPM is saying. The expected return on the market is 10.2%, the risk-free rate is 1%, and the beta for UBER is 1.19.
You want to exploit the mispricing using an arbitrage portfolio and the recipe from the book. Give the weight in the risk-free asset in percentage.
{Give your answer as a percentage with 2 decimals, e.g., if the answer is 0.345224 (or 34.5224%) , enter 34.52 as your answer.}
In: Finance
According to your personal analysis, the expected return of NFLX should be 8.2%. However, this is not necessarily what the CAPM is saying. The expected return on the market is 11.8%, the risk-free rate is 1.4%, and the beta for NFLX is 1.14.
You want to exploit the mispricing using an arbitrage portfolio and the recipe from the book. Give the weight in the risk-free asset in percentage.
{Give your answer as a percentage with 2 decimals, e.g., if the answer is 0.345224 (or 34.5224%) , enter 34.52 as your answer.}
In: Finance