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Mang Asar Inc, Should Make The Change To Meet The Desired Ebit
Mang Asar Inc, Should Make The Change To Meet The Desired Ebit
financial management
bsa4
PRESENT PROPOSED DIFFRENCE
PRODUCTION 5000 7000 2000
P/UNIT 100 95 5
SALES 500000 665000
F/COST 200000 250000 50000
EQUITY 500000 900000 400000
DEBT 0 0
EBIT 500000 900000
VC 50 10 40
(SP-VC)U/SOLD-FC=EBIT
(100-N)5000-200000=50000
500000-50000N-200000=50000
250000=50000N
N=50
7000(95-40) 5000(100-50)
2.85 5
7000(95-40)-250000 5000(50)-20000
OPER.LEVERAGE DECREASE FROM 5-2.85
250000/(95-40)=4545 UNITS
Mang Asar Inc should opt to finace the 400k additional source of capital from debt source since ROA is only 10%.
email:karenmdlrc@gmail.com
REMARK
INCREASE
DECREASE
UP
UP
LESS
LESS
LESS
is only 10%.
neil dela pena
financial management
bsa4