At an output level of 18,000 units, you have calculated that the degree of operating leverage...

60.1K

Verified Solution

Question

Finance

At an output level of 18,000 units, you have calculated that thedegree of operating leverage is 2.10. The operating cash flow is$46,500 in this case. Ignore the effect of taxes.

a. What are fixed costs? (Do not round intermediate calculationsand round your answer to the nearest whole number, e.g., 32.)

b. What will the operating cash flow be if output rises to19,000 units? (Do not round intermediate calculations and roundyour answer to 2 decimal places, e.g., 32.16.)

c. What will the operating cash flow be if output falls to17,000 units? (Do not round intermediate calculations and roundyour answer to 2 decimal places, e.g., 32.16.)

Answer & Explanation Solved by verified expert
4.1 Ratings (484 Votes)
aWhich means in the absence ofDepreciation and taxation EBIT Operating cash flowputting    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

At an output level of 18,000 units, you have calculated that thedegree of operating leverage is 2.10. The operating cash flow is$46,500 in this case. Ignore the effect of taxes.a. What are fixed costs? (Do not round intermediate calculationsand round your answer to the nearest whole number, e.g., 32.)b. What will the operating cash flow be if output rises to19,000 units? (Do not round intermediate calculations and roundyour answer to 2 decimal places, e.g., 32.16.)c. What will the operating cash flow be if output falls to17,000 units? (Do not round intermediate calculations and roundyour answer to 2 decimal places, e.g., 32.16.)

Other questions asked by students