Busıness Fınance I

Yanıt Açıklaması: Break-even sales = Fixed Costs / (P-VC) = 60,000 / (15-10) = 60,000 / 5 = 12,000 Actual Sales = Price * Quantity sold = 15 * 1,000 = 15,000 Margin of Safety (in dollars) = Total actual sales - Break-even sales = 15,000 -12,000 =3,000 Margin of Safety = Margin of safety in dollars / Total actual sales = 3,000 / 15,000 = 0.2

Yanıt Açıklaması: The degree of operating leverage is a concept widely used to assess the operating risk of a business stemming from its cost structure. Basically, the degree of operating leverage shows how much the operating income of the business changes with a relative change in its sales. In fact it is a multiple depicting how many times the operating income of a business changes in relation to a percentage change in the sales.

Yanıt Açıklaması: When using financial ratios, factors that needs to be considered are; • Comparing ratios for the company’s current year with those of preceding years, e.g., 5 to 10 years; • Comparing ratios of the company with those of its competitors (These can be obtained from the published financial statements of competitors); and • Comparing the company’s ratios with ratios for the industry in which the company operates. (Industry statistics can be obtained from annual publications of trade associations; for example, TUSIAD publishes such ratios for various industries. For some of the ratios, data can be obtained from weekly stock exchange magazines or internet databases.) Therefore, the correct answer is E.

Yanıt Açıklaması: First we need to calculate contribution margin ratio as: ($2-$1.2)/$2=0.4 Then we need to divide total fixed cost by contribution margin ratio as: $50,000/0.4=$125,000

Yanıt Açıklaması: Financial decision-making includes three kinds of company decisions; investing, financing, and decisions about dividends with balancing benefits and costs for the good of company they are working at.

Yanıt Açıklaması: $300,000 - ($10 * $12) = $180,000 $180,000 / $300,000 = 0.6

Yanıt Açıklaması: Net working capital = Current assets - current liabilities = $100.000 - $70.000 = $30.000

Yanıt Açıklaması: A higher DOL implies a higher business risk. For companies with high fixed costs, the DOL will be automatically higher.

Yanıt Açıklaması: Current assets are the assets that are expected to be converted into cash within the next year or within the next operating cycle, whichever is longer. Common types of current assets are; cash and cash equivalents, trade receivables, inventories, and prepaid expenses.The correct answer is A.

Yanıt Açıklaması: Amortizing loans is another common type of loan where the initial amount borrowed and interest is repaid in equal periodic installments.

Yanıt Açıklaması: QuickRatio= (Cash+CashEquiv.+TradingSec.+Accts.Rec.+NotesRec.) / Current Liabilities