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From the end of Chapter 12, complete Study Problem...

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From the end of Chapter 12, complete Study Problems 12-1 and 12-5. Post the answers to the discussion board. Remember to complete all parts of the problems and report the results of your analysis. Do not forget to show the necessary steps and explain how your attained that outcome. Please find the website that goes alongside the textbook listed below: . http://wps.prenhall.com/bp_keown_fof_7/144/37020/9477271.cw/index.html 12-1. Distinguish between business risk and financial risk. What gives rise to, or causes, each type of risk? 12-5. A break-even analysis assumes linear revenue and cost functions. In reality, these linear functions deviate over large output and sales levels. Why? PLEASE SHOW ALL STEPS AND EXPLAIN ANSWER,From the end of Chapter 12, complete Study Problems 12-1 and 12-5. Post the answers to the discussion board. Remember to complete all parts of the problems and report the results of your analysis. Do not forget to show the necessary steps and explain how your attained that outcome. 12-1. Distinguish between business risk and financial risk. What gives rise to, or causes, each type of risk? PROBLEM 12-1 LEVERAGE ANALYSIS DATA Sales 50,439,375 Variable Costs 25,137,000 Revenue before fixed costs 25,302,375 Fixed Costs 10,143,000 EBIT 15,159,375 Interest expense 1,488,375 EBT 13,671,000 Taxes 6,835,500 Net Income 6,835,500 Operating leverage = Financial leverage = Combined leverage = A) Breakeven point = B) Sales increase 30% % of Earnings increase =

 

Paper#6887 | Written in 18-Jul-2015

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