Business Finance
GCU Chapters 13 &16 Short Term and Long Term Financial Decisions Paper

Grand Canyon University

Question Description

Complete the following problems from Chapters 13-16 in Principles of Managerial Finance: Long-Term and Short-Term Financial Decisions: P13-7; P13-12; P14-9; P15-3; P15-5; P16-20

Use the Chapters 13-16 Excel resource (if needed) to complete the problem-set assignment in this topic.

Please show all work for each problem.

You are not required to submit this assignment to Turnitin.

Final Answer

Hi there!Attached please find the completed solutions to all problems.Because you couldn't gain access to the text, I rented the textbook from Amazon:https://www.amazon.com/Principles-Managerial-Finan...So that is where I took the questions. Let me know if we need to adjust or revise anything.Thanks again,Selenica

Sales
VC
Rental
a)

b)

8 per unit
6 per unit
4000 fixed
๐ต๐‘Ÿ๐‘’๐‘Ž๐‘˜ ๐ธ๐‘ฃ๐‘’๐‘› ๐‘ƒ๐‘œ๐‘–๐‘›๐‘ก ๐‘ข๐‘›๐‘–๐‘ก๐‘  =

๐น๐‘–๐‘ฅ๐‘’๐‘‘
4000
=
= 2,000 ๐‘ข๐‘›๐‘–๐‘ก๐‘ 
๐‘†๐‘Ž๐‘™๐‘’๐‘  โˆ’ ๐‘‰๐‘Ž๐‘Ÿ๐‘–๐‘Ž๐‘๐‘™๐‘’ 8 โˆ’ 6

EBIT Calculation:
Sales
Less: VC (6 * 1500)
Contribution Margin
Less: Fixed Cost
EBIT

10000
9000
1000
4000
-3000

c)

If price rises to:
Sales (10 * 1500)
Less: VC (6 * 1500)
Contribution Margin
Less: Fixed Cost
EBIT

10
15000
9000
6000
4000
2000

d)

To achieve an EBIT of 4000:
๐ธ๐ต๐ผ๐‘‡ + ๐น๐‘–๐‘ฅ๐‘’๐‘‘
4000 + 4000 8000
=
=
= 4000 ๐‘ข๐‘›๐‘–๐‘ก๐‘  ๐‘ก๐‘œ ๐‘๐‘Ÿ๐‘œ๐‘‘๐‘ข๐‘๐‘’
๐‘ƒ๐‘Ÿ๐‘–๐‘๐‘’ ๐‘ข๐‘›๐‘–๐‘ก โˆ’ ๐‘‰๐‘Ž๐‘Ÿ๐‘–๐‘Ž๐‘๐‘™๐‘’ ๐ถ๐‘œ๐‘ ๐‘ก (๐‘ข๐‘›๐‘–๐‘ก)
8โˆ’6
2

e)

4000
= 2000
8โˆ’6
๐‘†๐‘Ž๐‘™๐‘’๐‘  = ๐‘‰๐‘Ž๐‘Ÿ๐‘–๐‘Ž๐‘๐‘™๐‘’ + ๐น๐‘–๐‘ฅ๐‘’๐‘‘
2000๐‘ฅ = 6 โˆ— 2000 + 4000
2000๐‘ฅ = 12000 + 4000
2000๐‘ฅ = 16000
๐‘ฅ = $8
๐ต๐ธ๐‘ƒ ๐‘ข๐‘›๐‘–๐‘ก๐‘  =

Sales:
Units:

16000
2000

๐‘๐‘Ÿ๐‘œ๐‘‘๐‘ข๐‘๐‘’

a)

Earnings per share represents the total amount of income generated by the company that is available to the comm
The formula for EPS is:
๐ธ๐‘ƒ๐‘† =

b)

๐ธ๐ต๐ผ๐‘‡ โˆ’ ๐ผ๐‘›๐‘ก๐‘’๐‘Ÿ๐‘’๐‘ ๐‘ก 1 โˆ’ ๐‘‡๐‘Ž๐‘ฅ ๐‘…๐‘Ž๐‘ก๐‘’ โˆ’ ๐‘ƒ๐‘Ÿ๐‘’๐‘“๐‘’๐‘...

Selenica (1623)
Duke University

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