Question: For a project, a 10% decrease in revenue will cause its EBITDA to decrease by 20%. The depreciation and amortisation for the project is $10,000.

For a project, a 10% decrease in revenue will cause its EBITDA to decrease by 20%. The depreciation and amortisation for the project is $10,000. State whether the following statement is True or False:

The EBIT for the project will be more sensitive than EBITDA to such changes in revenue.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q1) For a project, a 10% decrease in revenue will cause its EBITDA to decrease by 20%. The depreciation and amortisation for the project is $10,000. State whether the following statement is True or...

Scenario You work as a financial analyst in the Finance division of the Rural Services Ltd an Australian agribusiness company. Rural Services Ltd provides a range of products and services, across...

Attached is the update for my worksheet 5 Use the format shown in worksheet 5-Research Summary to prepare a two-page summary of your analysis.This conclusion should summarize your research in a clear...

Use the format shown in worksheet 5-Research Summary to prepare a two-page summary of your analysis.This conclusion should summarize your research in a clear and concise manner.As part of this...

3. Using the midpoint method The following graph gives two points (A and B) along a hypothetical demand curve for jackfruit. 5. The variety of demand curves The following graph displays four demand...

What metrics does the company track (or should track)? How do business models and stages of growth drive metrics this company tracks? In your opinion, what is the OMTM for this company? What should...

assume all my current answers in yellow cells are incorrect. thanks guys 11 2 Excel Assignment 4 3. A beverage company that currently sells grape juice is considering adding apple juice to its...

AnalysingBega Cheese Limited (ASX code BGA): A. Industry Analysis 1. What would be the performance for the industry in next year, in next 5 years, and in the long run? And why do you think so? B....

AnalysingBega Cheese Limited (ASX code BGA): A. Industry Analysis 1. What would be the performance for the industry in next year, in next 5 years, and in the long run? And why do you think so? 2. Who...

Pavelka Company applied the pre-determined overhead rate to the following jobs. Job 625 626 627 628 629 620 Direct Labor Add your answer Integer, decimal, or E noation allo 354,000 330,000 175,000...

Assume that on December 31, 2009, Oslo Dahler issued NKR20 million of 10-year, 10% debentures. Proceeds were NKR15,762,000; therefore, the market rate of interest was 14%. (NKR is the Norwegian...

Which of the following does NOI describe what happened during the market crash on October 1 9 th , 1 9 8 7 ? Put option deltas computed from historical experience were too high. Prices moved so fast...

Determine the major differences between U.S. GAAP and IFRS disclosure reporting requirements related to each separately reportable operating segment. Next, give your opinion as to whether either U.S....