Question: Can someone please help me with practice questions. I keep messing it up somewhere along the way. You estimate that your say farm will generate


Can someone please help me with practice questions. I keep messing it up somewhere along the way.


You estimate that your say farm will generate 2.7 million of profits on sales of 4.4 million under normal economic conditions. If sales turn out to by 4.7 million, profits are expected to be 3 million. What is the degree of operating leverage? Enter your answer rounded to two decimal places. Astore will cost $900,000 to open. Variable costs will be 60% of sales and fixed costs are $250,000 per year. The investment costs will be depreciated straight-line over the 8 year life of the store to a salvage value of zero. The opportunity cost of capital is 13% and the tax rate is 35%. Find the operating cash flow each year if sales revenue is $600,000 per year. Enter your response below
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