What is the total combined leverage?
Business & Finance

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Haunted Forest, Inc.is selling fog machines.
Use the following information about Haunted Forest, Inc. to answer the following questions.
Average selling price per unit $325.
Variable cost per unit $187
Units sold 369
Fixed costs $15,287
Interest expense $4,183
Based on the data above, what will be the resulting percentage change in earnings per share if they expect units produced and sold to change 2.9 percent?
Round the answer to two decimals
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EPS = earning per share = net income/number of shares
net income = revenues  expenses = number of units*selling price {number of units*variable cost+fixed costs +interest expense}
=369*325{369*187+15287+4183}= $ 31452
So EPS = 31452/number of shares
next year number of units is expected to decrease by 2.9%. Thus , new number of units will be
369*(100%2.9%)=369*(97.1%)=358 (rounded to closest integer)
Expected Net Income = 358*325{358*187+15287+4183}= $ 29934
Expected EPS= 29934/number of shares
Since number of share is assumed to be the same (not always true in real life) the decrease in EPS is simply {(3145229934)/31452 }* 100% = 4.8%
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