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Fin 2640 week 3 lab 1

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Fin 2640 week 3 lab 1;Genatron wants to estimate what will happen to its income before interest and taxes if its net sales change from the 2012 level of $1,500,000. Refer to Genatron?s 2012 income statement below, where the income before interest and taxes is $247,000 (EBT of $190,000 plus Interest of $57,000). Assume that the cost of goods sold is variable expenses and that the other operating expenses are fixed.;a. Calculate the expected amount of income before interest and taxes for both a 10 percent decrease and a 10 percent increase in net sales for next year.;b. Determine the percentage change in income before interest and taxes given your calculations in Part a, and determine the degree of operating leverage.;c.

 

Paper#78223 | Written in 18-Jul-2015

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