6. A firm has fixed costs of $1,000,000 and an EBIT of $600,000. They are selling...

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6. A firm has fixed costs of $1,000,000 and an EBIT of $600,000. They are selling custom bicycles at a price of $450 per unit and have a variable cost ratio of 60%. What is the firm's current level of sales? 4,000,000 7. Fixed Costs = $50,000/year, Sales Price per Unit = $50, Variable Cost Ratio = 40%. a. Determine the break-even quantity and sales based on the information above. b. Draw a graph to illustrate the breakeven point. 8. Label all three balance sheets below as "Moderate", "Aggressive" or "Conservative" financing policies and label parts a - e. a. d. 1. B D C E b. e. 2. D B C E 3. D A B E 9. Of the three working capital financing policies from the problem above, which has the most risk? Which has the lowest? Explain. 10. Company XYZ purchased $150,000 worth of material on credit. The credit terms are 3/10 net 30. a.) If Company XYZ does not take the discount, what is the APR and EAR for the cost of trade credit? b.) Which rate (EAR or APR) is the true cost of trade credit? c.) Company XYZ is offered a $150,000 90-day add-on interest bank loan with an annual rate of 12% and 3 monthly payments. Calculate the 90-day interest rate, the total interest to add on, and the monthly payment amount (use a 360-day year). d.) What are the APR and the EAR of the bank loan? e.) Which source of financing is cheaper between accounts payable financing (not taking the discount), or the bank loan? Which one should XYZ take and why? 11. Below is the financial information for Henry Schein (HSIC). Inventory 13,000 Accounts Receivable 12,500 Accounts Payable 12,000 Net Sales 125,000 Cost of Goods Sold 100,000 a. Calculate HSIC's DIO, DSO, and DPO. b. Calculate HSIC's operating cycle and cash conversion cycle c. If HSIC's credit terms to its customers are net 30, is HSIC's collections department doing a good job at collecting receivables? 6. A firm has fixed costs of $1,000,000 and an EBIT of $600,000. They are selling custom bicycles at a price of $450 per unit and have a variable cost ratio of 60%. What is the firm's current level of sales? 4,000,000 7. Fixed Costs = $50,000/year, Sales Price per Unit = $50, Variable Cost Ratio = 40%. a. Determine the break-even quantity and sales based on the information above. b. Draw a graph to illustrate the breakeven point. 8. Label all three balance sheets below as "Moderate", "Aggressive" or "Conservative" financing policies and label parts a - e. a. d. 1. B D C E b. e. 2. D B C E 3. D A B E 9. Of the three working capital financing policies from the problem above, which has the most risk? Which has the lowest? Explain. 10. Company XYZ purchased $150,000 worth of material on credit. The credit terms are 3/10 net 30. a.) If Company XYZ does not take the discount, what is the APR and EAR for the cost of trade credit? b.) Which rate (EAR or APR) is the true cost of trade credit? c.) Company XYZ is offered a $150,000 90-day add-on interest bank loan with an annual rate of 12% and 3 monthly payments. Calculate the 90-day interest rate, the total interest to add on, and the monthly payment amount (use a 360-day year). d.) What are the APR and the EAR of the bank loan? e.) Which source of financing is cheaper between accounts payable financing (not taking the discount), or the bank loan? Which one should XYZ take and why? 11. Below is the financial information for Henry Schein (HSIC). Inventory 13,000 Accounts Receivable 12,500 Accounts Payable 12,000 Net Sales 125,000 Cost of Goods Sold 100,000 a. Calculate HSIC's DIO, DSO, and DPO. b. Calculate HSIC's operating cycle and cash conversion cycle c. If HSIC's credit terms to its customers are net 30, is HSIC's collections department doing a good job at collecting receivables?