Questions from Corporate Finance

Q: Match each of the following terms to one of the definitions or

Match each of the following terms to one of the definitions or descriptions listed below: sensitivity analysis, scenario analysis, break-even analysis, operating leverage, Monte Carlo simulation, deci...

Q: Break-even analysis Break-even calculations are most often concerned

Break-even analysis Break-even calculations are most often concerned with the effect of a Short fall in sales, but they could equally well focus on any other component of cash flow. Dog Days is consid...

Q: Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each

Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $100. The materials cost for a synthetic diamond is $40. The fixed costs incurred each year for factory...

Q: Modern Artifacts can produce keepsakes that will be sold for $80

Modern Artifacts can produce keepsakes that will be sold for $80 each. Non depreciation fixed costs are $1,000 per year, and variable costs are $60 per unit. The initial investment of $3,000 will be d...

Q: Break-even analysis Define the cash-flow break-even

Break-even analysis Define the cash-flow break-even point as the sales volume (in dollars) at which cash flow equals zero. a. Is the cash-flow break-even level of sales higher or lower than the zero-p...

Q: Break-even analysis A financial analyst has computed both accounting and

Break-even analysis A financial analyst has computed both accounting and NPV breakeven sales levels for a project using straight-line depreciation over a six-year period. The project manager wants to...

Q: Supply the missing words: “There are three forms of the

Supply the missing words: “There are three forms of the efficient-market hypothesis. Tests of randomness in stock returns provide evidence for the form of the hypothesis. Tests of stock price reaction...

Q: Fixed and variable costs In a slow year, Deutsche Burgers will

Fixed and variable costs In a slow year, Deutsche Burgers will produce 2 million hamburgers at a total cost of $3.5 million. In a good year, it can produce 4 million hamburgers at a total cost of $4.5...

Q: Operating leverage You estimate that your cattle farm will generate $1

Operating leverage You estimate that your cattle farm will generate $1 million of profits on sales of $4 million under normal economic conditions and that the degree of operating leverage is 8. a. Wha...

Q: Operating leverage Look again at Modern Artifacts in Problem 12.

Operating leverage Look again at Modern Artifacts in Problem 12. a. What is the degree of operating leverage of Modern Artifacts when sales are $7,000? b. What is the degree of operating leverage when...