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Category > Management Posted 05 Oct 2017 My Price 5.00

fixed operating costs

BREAK-EVEN ANALYSIS A company’s fixed operating costs are $500,000, its variable costs are $3.00 per unit, and the product’s sales price is $4.00. What is the company’s break-even point; that is, at what unit sales volume will its income equal its costs?

OPTIMAL CAPITAL STRUCTURE Jackson Trucking Company is in the process of setting its target capital structure. The CFO believes the optimal debt ratio is somewhere between 20% and 50%, and her staff has compiled the following projections for EPS and the stock price at various debt levels:

 

Debt Ratio

Projected EPS

Projected Stock Price

20%

$ 3.20

$35.00

30

3.45

36.50

40

3.75

36.25

50

3.50

35.50

 

 

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Status NEW Posted 05 Oct 2017 09:10 PM My Price 5.00

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