Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1,000,000 in a start-up firm. He is nervous, however, about future economic volatility. He asks you to analyze the following financial data for the past year's operations of the two firms he is considering and give him some business advice. Variable cost per unit (a) Sales revenue (8,100 units * $32.00) Variable cost (8,100 units a) Contribution margin Fixed cost Net income Required A Required B Required C Required a. Use the contribution margin approach to compute the operating leverage for each firm. b. If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will increase.) Company Name Larson $ 20.00 c. If the economy contracts in coming years, Larson and Benson will both suffer a 12 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units decreases, both total revenue and total variable cost will decrease.) Complete this question by entering your answers in the tabs below. Variable cost per unit Sales revenue $ 259,200 (162,000) $ 97,200 (24,100) $ 73,100 $ If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will increase.) Note: Amounts to be deducted should be indicated with a minus sign. Enter "Variable cost per unit" and "Percentage change" amounts to 2 decimal places. Round all other answers to the nearest wiele dollar amount. Larson Benson $ 10.00 $ 259,200 (81,000) $ 178,200 (105,100) $ 73,100 Company Name 20.00 $ Benson Help 10.00 Show less Save & Exit

Arnold Vimka is a venture capitalst facing two alternative investment opportunitios. He intends to invest $1,000,000 in a start-up firm: He is nervous, however, about future economic volatility. He asks you to analyze the following financial data for the past year's operations of the two firms he is considering and glve him some business advice? Required a. Use the contribution margin approach to compute the operating leverage for each firm. b. If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note. Since the number of units increases, both revenue and variable cost will increase.) c. If the economy contracts in coming years, Larson and Benson will both suffer a 12 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note. Since the number of units decreases, both total revenue and total variable cost will decrease.) Complete this question by entering your answers in the tabs below. If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will increase.) Note: Amounts to be deducted should be indicated with a minus sign. Enter "Variable cost per unit" and "Percentage change" amounts to 2 decimal places. Round all other answers to the nearest witfie dollar amount. Complete this question by entering your answers in the tabs below. If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year incre that the selling price remains unchanged. Compute the change in net income for each firm in dollar amo percentage. (Note: Since the number of units increases, both revenue and variable cost will increase.) Note: Amounts to be deducted should be indlcated with a minus sign. Enter "Variable cost per unit" and amounts to 2 decimal places. Round all other answers to the nearest whole dollar amount. Complete this question by entering your answers in the tabs below. If the economy contracts in coming years, Larson and Benson will both suffer a 12 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units decreases, both total revenue and total variable cost will decrease.) Note: Amounts to be deducted should be indicated with a minus sign. Enter "Variable cost per unit" and "Percentage change" amounts to 2 decimal places. Round all other answers to the nearest whole dollar amount