Homework Sourse1st problem 2nd problem 3rd problemSolution1 Accumulated dep
1st problem)
2nd problem)
3rd problem)
Solution
1-
Accumulated depreciation
3000*5
15000
Book value of asset
30000-15000
15000
selling price
35000
profit or loss from sale
35000-15000
20000
taxes -25%
20000*25%
5000
b
selling price
25000
profit or loss from sale
25000-15000
10000
taxes -25%
10000*25%
2500
c
selling price
15000
profit or loss from sale
15000-15000
0
taxes -25%
0*25%
0
D
selling price
12000
profit or loss from sale
12000-15000
-3000
taxes -25%
0*25%
-750
2-
revenue
2000000
cash expense
800000
depreciation
200000
EBIT
1000000
taxes -34%
340000
EAT
660000
Add depreciation
200000
operating cash flow
860000
3-
sales
50439375
variable cost
25137000
revenue before fixed cost
25302375
fixed cost
10143000
EBIT
15159375
interest
1488375
EBT
13671000
taxes
6835500
EAT
6835500
BEP in sales
fixed cost/contribution margin ratio
10143000/.501639
20219719.76
Contribution margin ratio = revenue before fixed cost/sales
0.501639
current level
New level with 30% increase
sales
100%
50439375
65571187.5
variable cost
0.498361
25137000
32678100
revenue before fixed cost
25302375
32893087.5
fixed cost
10143000
10143000
EBIT
15159375
22750087.5
interest
1488375
1488375
EBT
13671000
21261712.5
taxes
0.5
6835500
10630856.25
EAT
6835500
10630856.25
percentage of increase in sales
30%
Operating leverage = contribution/EBIT
0.50
Financial leverage = EBIT/EBT
1.07
Combined leverage = contribution/EBT
1.55
% of earning increase
(22750087.5-15159375)/15159375
50.07%
% change in net income
(10630856.25-6835500)/6835500
55.52%
| 1- | Accumulated depreciation | 3000*5 | 15000 | |
| Book value of asset | 30000-15000 | 15000 | ||
| selling price | 35000 | |||
| profit or loss from sale | 35000-15000 | 20000 | ||
| taxes -25% | 20000*25% | 5000 | ||
| b | selling price | 25000 | ||
| profit or loss from sale | 25000-15000 | 10000 | ||
| taxes -25% | 10000*25% | 2500 | ||
| c | selling price | 15000 | ||
| profit or loss from sale | 15000-15000 | 0 | ||
| taxes -25% | 0*25% | 0 | ||
| D | selling price | 12000 | ||
| profit or loss from sale | 12000-15000 | -3000 | ||
| taxes -25% | 0*25% | -750 | ||
| 2- | revenue | 2000000 | ||
| cash expense | 800000 | |||
| depreciation | 200000 | |||
| EBIT | 1000000 | |||
| taxes -34% | 340000 | |||
| EAT | 660000 | |||
| Add depreciation | 200000 | |||
| operating cash flow | 860000 | |||
| 3- | sales | 50439375 | ||
| variable cost | 25137000 | |||
| revenue before fixed cost | 25302375 | |||
| fixed cost | 10143000 | |||
| EBIT | 15159375 | |||
| interest | 1488375 | |||
| EBT | 13671000 | |||
| taxes | 6835500 | |||
| EAT | 6835500 | |||
| BEP in sales | fixed cost/contribution margin ratio | 10143000/.501639 | 20219719.76 | |
| Contribution margin ratio = revenue before fixed cost/sales | 0.501639 | |||
| current level | New level with 30% increase | |||
| sales | 100% | 50439375 | 65571187.5 | |
| variable cost | 0.498361 | 25137000 | 32678100 | |
| revenue before fixed cost | 25302375 | 32893087.5 | ||
| fixed cost | 10143000 | 10143000 | ||
| EBIT | 15159375 | 22750087.5 | ||
| interest | 1488375 | 1488375 | ||
| EBT | 13671000 | 21261712.5 | ||
| taxes | 0.5 | 6835500 | 10630856.25 | |
| EAT | 6835500 | 10630856.25 | ||
| percentage of increase in sales | 30% | |||
| Operating leverage = contribution/EBIT | 0.50 | |||
| Financial leverage = EBIT/EBT | 1.07 | |||
| Combined leverage = contribution/EBT | 1.55 | |||
| % of earning increase | (22750087.5-15159375)/15159375 | 50.07% | ||
| % change in net income | (10630856.25-6835500)/6835500 | 55.52% |
