Question: Question 4 (a) Tora Bhd most recently sold 100.000 units at RM7.50 each; its variable operating costs are RM3 per unit, and its fixed operating

Question 4 (a) Tora Bhd most recently sold 100.000 units at RM7.50 each; its variable operating costs are RM3 per unit, and its fixed operating costs are RM250,000. Annual interest charges total RM80,000 and the firm has 8.000 shares of RM5 (annual dividend) preferred stock outstanding. 20.000 units of common stock had been issued and outstanding. Assume that the firm is subject to a 40% tax rate. (1) At what level of sales in units) would the firm break even on operations. (2 marks) (11) Calculate the firm's earnings per share (EPS) in tabular form at (1) the current level of sales (2) a 120,000-unit sales level. (11 marks) (111) Using the current RM750,000 level of sales as a base, calculate the firm's degree of operating leverage (DOL). (2 marks) (iv) Using the EBIT associated with the RM750.000 level of sales as a base, calculate the firm's degree of financial leverage (DFL). (2 marks) Use the degree of total leverage (DTL) concept to determine the effect (in percentage terms) of a 50% increase in Tora's sales from the RM750,000 base level on its earnings per share. (2 marks) (6) Describe any THREE (3) common collection techniques under accounts receivable management (6 marks) [Total: 25 Marks]

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