Operating and Financial Leverage

Chapter 5 Operating and Financial Leverage Discussion Questions |5-1. |Discuss the various substance abuses for break-even analysis. | | | | | |such(prenominal) analysis allows the firm to determine at what level of trading operations it will break even (earn zero profit) | | |and to explore the relationship between volume, costs, and profits. | | | | |5-2. |What factors would cause a difference in the use of financial supplement for a utility company and an simple machine | | |company?

| | | | | |A utility is in a st fit, predictable industry and therefore can afford to use more than financial leverage than an | | |automobile company, which is generally subject to the influences of the calling cycle. An automobile | | |manufacturer may not be able to service a large amount of debt when there is a downturn in the economy. | | | | |5-3. |Explain how the break-even point and operating leverage are affected by the choice of manufacturing facilities | | |(labor intensive versus hood intensive). | | |... If you want to get a full essay, order it on our website: Orderessay

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