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

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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.

Tutor Answer

Selenica
School: Duke University

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
π΅π‘Ÿπ‘’π‘Žπ‘˜ 𝐸𝑣𝑒𝑛 π‘ƒπ‘œπ‘–π‘›π‘‘ 𝑒𝑛𝑖𝑑𝑠 =

𝐹𝑖π‘₯𝑒𝑑
4000
=
= 2,000 𝑒𝑛𝑖𝑑𝑠
π‘†π‘Žπ‘™π‘’π‘  βˆ’ π‘‰π‘Žπ‘Ÿπ‘–π‘Žπ‘π‘™π‘’ 8 βˆ’ 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:
𝐸𝐡𝐼𝑇 + 𝐹𝑖π‘₯𝑒𝑑
4000 + 4000 8000
=
=
= 4000 𝑒𝑛𝑖𝑑𝑠 π‘‘π‘œ π‘π‘Ÿπ‘œπ‘‘π‘’π‘π‘’
π‘ƒπ‘Ÿπ‘–π‘π‘’ 𝑒𝑛𝑖𝑑 βˆ’ π‘‰π‘Žπ‘Ÿπ‘–π‘Žπ‘π‘™π‘’ πΆπ‘œπ‘ π‘‘ (𝑒𝑛𝑖𝑑)
8βˆ’6
2

e)

4000
= 2000
8βˆ’6
π‘†π‘Žπ‘™π‘’π‘  = π‘‰π‘Žπ‘Ÿπ‘–π‘Žπ‘π‘™π‘’ + 𝐹𝑖π‘₯𝑒𝑑
2000π‘₯ = 6 βˆ— 2000 + 4000
2000π‘₯ = 12000 + 4000
2000π‘₯ = 16000
π‘₯ = $8
𝐡𝐸𝑃 𝑒𝑛𝑖𝑑𝑠 =

Sales:
Units:

16000
2000

π‘π‘Ÿπ‘œπ‘‘π‘’π‘π‘’

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:
𝐸𝑃𝑆 =

b)

𝐸𝐡𝐼𝑇 βˆ’ πΌπ‘›π‘‘π‘’π‘Ÿπ‘’π‘ π‘‘ 1 βˆ’ π‘‡π‘Žπ‘₯ π‘…π‘Žπ‘‘π‘’ βˆ’ π‘ƒπ‘Ÿπ‘’π‘“π‘’π‘...

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Anonymous
Goes above and beyond expectations !

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