Below is information on three medical equipment suppliers:

	Stryker	Medtronic	Zimmer	Industry average
Average selling price	43,750	33,750	65,000	37,500
Units sold	1,875	2,312	1,063	1,563
Interest expense	937,500	1,250,000	3,750,000	1,875,000
Variable costs (% of sales)	60%	45%	40%	48%
Fixed costs	12,500,000	8,750,000	25,000,000	13,750,000
Preferred dividends	1,250,000	0	750,000	375,000
Common actions	6,250,000	10,000,000	3,750,000	8,750,000

Using the information given in the table above, prepare income and expense statements for each company and the industry average in Excel. Suppose that each faces a tax rate of 30%.

Calculate the breakeven points in units and dollars and the degrees of operating, financial and combined leverage for each of the companies and the industry average in Excel.

Answer rating: 100% (QA)

Sheet1 Variable cost 12345 Particulars Unit A 3 Average selling price Sale... View the full answer