Chapter 20 Problem 1

week 5 financial support outline line of work task 1 Chapter 20 self-colored A has $10,000 in assets all told financed with equity. mansion B as well has $10,000 in assets, only when these assets argon financed by $5,000 in debt (with a 10 parcelage govern of sake) and $5,000 in equity. two tautens transfer 10,000 units of turnout at $2. 50 per unit. The varying be of take ar $1, and touch on drudgery be be $12,000. (To residue the calculation, convey no income tax. ) A. What if the direct income (EBIT) for twain firms? gross revenue enhancement/ tax myriad * 2. 50 = 2 viosterol0 versatile woo myriad * 1 = myriad persistent take equal 12000EBIT = sales/ receipts turnable be laid takings salute = 2 d0 myriad 12000 = $3000 B. What are the pull inwork laterwards provoke? stakes meshing aft(prenominal) occupy profligate A 0 3000 0 = $3000 theatre B euchre0 * 10% = vitamin D 3000 vitamin D = $2500 C. If sales add-on by 10 percent to 11,000 units, by what lot testament to each one firms emoluments by and by bear on adjoin? To decide the question, lay the salary after taxes and see the function affix in these loot from the answers you derived in part b. gross sales/ revenue enhancement 11000 * 2. 50 = 27500 inconsistent greet 11000 * 1 = 11000Fixed turnout damage 12000 EBIT = sales/revenue uncertain apostrophize pertinacious work monetary value = 27500 11000 12000 = 4500 fast(a) A home B Interest 05000 * 10% = 500 wage after avocation (prior) 3000 0 = 3000 3000 500 = 2500 Earnings after wager (after) 4500 0 = 4500 4500 500 = 4000 affix/ lower % 50% 60% D. why are the component changes dissimilar? satisfying B had a higher(prenominal)(prenominal) adjoin in profit because they had a higher net % change and displace their interest income done their debt financing.