...Chapter 13 What is operating leverage, and how does it affect a firm’s business risk? Operating leverage is the use of fixed costs rather than variable costs. If most costs are fixed, hence do not decline when demand falls, then the firm has high operating leverage. Effect of operating leverage More operating leverage leads to more business risk, for then a small sales decline causes a big profit decline Typical situation: Can use operating leverage to get higher EBIT or operating income with higher quantity sold, but risk also increases. Operating Breakeven EBIT = PQ – VQ – F = 0 P = price per unit Q = units of output V = variable cost per unit F = Fixed operating cost QBE = Breakeven Quantity QBE = F / P - V Total Operating Cost = VQ + F Higher QBE higher operating leverage 1. A company estimates that its fixed operating costs are $500,000, and its variable costs are $3 per unit. Each unit produced sells for $4. What is the company’s breakeven point? 2. The Weaver Watch Company manufacturers ladies’ watches that are sold through discount houses. Each watch is sold for $25, the fixed costs are $140,000 for 30,000 watches or less; variable costs are $15 per watch. a. What is the firm’s gain or loss at sales of 8,000 watches? 18,000 watches? b. What is the breakeven point? Illustrate with a graph. Financial risk is the additional risk placed on common stock holders as...
Words: 556 - Pages: 3
...Week 10 Writing Assignment EG371 Chapter13, “Applying Principles of ‘Science Learning’ to your textbook focuses on analyzing an article suggesting that steroid use in baseball is at epidemic proportions. The goal of this report is to define that it is impossible find definitive evidence in support of one view over all competing views and usual subject sometimes you have to dig a bit deeper. This assignment was created to reinforce your developing research skills for critical decision making. The document explains an indefinite study of how ball players “Major League Baseball “ have used enhancements drugs like steroids to increase their muscle mass, strength, and endurance. The article produced a lot of tactful research methods like quantitative and qualitative ideas on supporting this article. It also demonstrated a simple questionnaire and bulleted summaries to further explain what highly popular websites like WebMD and Sports Illustrated had to say about steroids in baseball. I think Sports Illustrated was negatively represented by the author solely because SI article did not give a good numerical estimate of the prevalence of steroid use. Although, the article produce a lot of cited information to back up what it was explaining, a survey, or maybe a few peer—to—peer interviews would be more insightful. I believe the author was right on a few things in the part of ‘Dangers of Steroids Use’ when it explain the story of Caminiti. In honesty, each paragraph was out of place...
Words: 284 - Pages: 2
...Introduction: Introduction: Doing this organizational analysis, I wanted to further my knowledge about the car industry. The first prospect that came to mind was General Motors. I picked General Motors because of its popularity in the United States. I had some interesting general knowledge of the company like the dependability and quality of their cars. Some comments were, “I rather have a Chevy Truck than a Ford” and “The general motors cars are more dependable than Ford.” These comments made it clear that I liked the General Motors auto line of cars. Then, I asked myself what would be a cooperate company just as enormous. I came to a conclusion that Ford would be the other company. Though Ford has a nice line of cars, I had some negative thoughts about the company. Acronyms were said such as, “Found On Road Dead” or “Fix Or Repair Daily.” Each of those sayings had put a dent in my thoughts that I would not buy a Ford, not solely on those sayings, but also because of the influence of my parents and other such adverse publicity. These companies have a long-standing tradition in the U.S as manufacturing giants in the automobile industry, since they began here. With these two cooperategiants, I can evaluate and compare both companies financially. My over all preference. was to buy the General Motors line of cars; in doing this project I wanted to know if by researching each company if I would change my mind. Also, this will enable me to draw a conclusion on which company would...
Words: 2386 - Pages: 10
...GOVT 2301 American Government: National, State, and Local I HCCS Southwest College Spring 2012 Sections: CRN 81371, 81372 Campus: Stafford Professor: Larry J. Gonzalez, PhD Room: W114 E-mail: Larry.Gonzalez@hccs.edu Voice: 713.718.6998 Purpose of the Course: Government 2301 is one of two courses designed to introduce students to the study of government in the United States at the national, state, and local levels. This particular survey of the American system of government includes a study of the fundamental principles of political science, the study of the national and state constitutions, methods of participation, and analyzes contemporary policies. This course is fully transferable to all Texas State colleges and universities. Required Texts: O’Connor, Karen, Larry J. Sabato, Alixandra. 2011. American Government: Roots and Reform, Texas Edition. Pearson Education. Paperback Edition/ISBN-13: 978-1-256-28850-3; ISBN-10:1-256-28850-0 Recommended: Study Guides are available on-line to accompany the required texts. Students are also encouraged to follow current political events by reading newspapers and following media news reports. Please refer to instructor’s Learning Web page. Student Notification Statements: 1. Advising and Counseling Services Advising can be accomplished by contacting the Student Associate at 713-718-6879, selection 2, and on-site advising at other HCC locations upon request. Confidential sessions with education counselors...
Words: 1634 - Pages: 7
...Components of Expectancy There are three components of the expectancy theory of motivation which will be explained in this essay. After the three components are explain, the components will be put to use in a real world scenario. The scenario introduces a company that produces a line of branded professional audio products for which they strive to provide the highest quality audio products in the industry. Now let’s get started with explain the three components. The first component is valence that refers to the appeal of a consequence to an individual employee. Salary, job security, benefits, feeling of accomplishment, and advancement. Optimistic or undesirable, valence can differ in size. The scale of valence is how necessary a conclusion is for an employee. The establishment of valence conclusions to employees is vital to inspire and keep valuable employees. As stated before, valence is the first module of the expectancy concept and is the important feature when deciding a stimulus factor for employees. Valence should be great. Employees should want or need the results they acknowledged if they are to achieve a higher level. Thus managers must regulate what results an employee wishes, or the valence of dissimilar results for the employee. The second key factor in the expectancy model is instrumentality. It is insight about the degree to which presentation of one or more actions will lead to the achievement of a specific outcome. The certain level of work performance and...
Words: 665 - Pages: 3
...or can be a piece of software that has been set up to imitate normal systems that has been connected to a group of computers and has been designed in a way that it appears to contain very important information. The real deal here is the system that has been created in order to monitor all activities On the other hand; the honey pot is secluded from the rest of the machines and serves as decoy to these attacks and to make them think they have actually gained access into a system and monitors all activity. Honeypots can be grouped into two: production and research. These Honeypots can then be further classified into three main categories: low-interaction, high-interaction and pure honey pots (Bell, Simon 2014) References www.utc.edu/.../chapter13.ppt Joseph Migga Kizza – A Guide to Computer Security Yasir Zahur – Intrusion Detection Systems – Overview (2002) http://www.whitehelm.com/intru-det.html http://www.ijetae.com/files/Volume2Issue11/IJETAE_1112_114.pdf http://www.symantec.com/connect/articles/intrusion-detection-theory-and-practice http://securehoney.net/dissertation.pdf ...
Words: 1398 - Pages: 6
...The current mortgage crisis can be simply explained as homeowner’s failure to meet their mortgage payments on time. Mortgage can be defined as a type of collateral agreement when a property owner who borrows money from a creditor may use his real property as collateral for the repayment of a loan. Some of the factors that lead to the current mortgage situation are sub-prime lending and the increase of interest rate for low income borrowers. These are some of the factors that lead to the mortgage crisis which cause homeowner’s to walk away. One of the reasons for the rise of the housing market was because of low interest rates and the fact the US is a credit economy. Having low interest rates, more people took out loans, and the lower income borrowers were encouraged to take out a loan for a house because they could afford the payments with low interest rates. Then when the interest rate rose, those lower income borrowers couldn’t afford to make payments. Another key contributor to the crisis of the housing market is due to sub-prime lending. Sub-prime lending is basically lending money to non-qualified borrowers, which means that those borrowers would not be approved of loans from other creditors because of their poor credit rating or low-income. Mortgage lenders continued to lend money out in order to maintain sales. A legal implication that might arise from debtors defaulting on a mortgage can be a foreclosure sale. A foreclosure sale is a legal procedure in which...
Words: 692 - Pages: 3
...The Rise and Fall of WorldCom Shabnam Rakeen RES500-Fundamentals of Quantitative Analysis Colorado State University – Global Campus Dr. Barry Smith The Rise and Fall of WorldCom The aftershock of the fall of WorldCom was not only felt in the United States but all over the world. Once a company that was ranked number 4 amongst the Fortune 500 companies was losing everything and was involved in turmoil of accounting fraud and financial troubles unimagined to anyone (Pandey & Verma, 2004). The fraudulent activities and financial troubles led to WorldCom filing bankruptcy protection under Chapter 11 and brought the end to a world known telecommunications company. What led to these financial troubles? How could the fraud go on for so long without notice? These were some of questions that the stakeholders of the company were gripped with. The purpose of this paper is to analyze the financial statements of WorldCom and determine whether these statements foreshadowed the troubles ahead. WorldCom was a successful telecommunications company with its history dating back to 1983. It started out as small long distance calling service provider called Long Distance Discount Service (LDDS) in 1983. Bernard Ebbers was one of the early investors in the company and 1985 became the chief executive officer of the company (Pandey & Verma, 2004). Under his direction, the company acquired Advantage Companies in 1989 and became a publically traded company. The company expanded through mergers...
Words: 2530 - Pages: 11
...Case 5 Debt Financing and Bankruptcy Lynna Revard Trident University Abstract The purpose of this paper is to go into detail and explain the different aspects of debt financing, bankruptcy, and the outcome of Hostess Brand Inc., filing for bankruptcy. It will go into detail of what debt financing is how to avoid different aspects of it. I will also go into detail and explain not only the history of bankruptcy, but also the different chapters of bankruptcy and how each one differs from the other. You will read about things that you might already know and hopefully by the end of this paper I am able to teach some things that you were possibly not aware of. Main Body Hostess Brands Inc. and its beloved bread and snack cake products date back to the late 1800s. Its brands are some of the best known snacks and breads in the United States. They make many of the top-selling snack cakes in convenience stores, including Twinkies®, CupCakes and Fruit Pies. Before becoming Hostess Brand Inc., the company was known by many names. Interstate Bakeries Corporation, Holsum Bakeries, Bakers Inn, Hostess Bakeries, and Hostess just to name a few. Effective November 2, 2009, the company was renamed Hostess Brands, Inc. after the cake division that featured Twinkies and Cupcakes although it continues its bread line including Wonder Bread. It has been a very successfully company since it started its productions however; in 2004 the company had to file for...
Words: 907 - Pages: 4
...[pic] 本科生毕业论文文献综述 （2012届） |论文题目 |A Study on Racial Discrimination in Crash | | | | | | |学生姓名 |谢薇 |学 号 |0808031004 | |专 业 |英语 |班 级 |085 | |指导教师 |颜钟祜 |职 称 |教授 | 杭州师范大学外国语学院 文献综述基本要求 |一、文献综述 | |含本选题国内外研究现状、研究主要成果、发展趋势、存在问题等内容，字数不少于3000字，力求内容切题，具综合归纳性。 | |综述正文须用本专业语种撰写。 | |二、查阅中外文献资料目录 | |所查阅的中外文献资料不得少于15篇（其中外文资料至少8篇），含作者、书名或论文题目、出版社或刊名、出版年月或期号及页码等，未经本人查阅的文献 | |资料目录不得列上。 | | ...
Words: 3088 - Pages: 13
...I chose to further examine the film Hoosiers from week 13 of class. After reviewing the film I will compare it with chapter 13 of Major Problems. Hoosiers really caught my interest as a great underdog story and that is why I chose to further study the 1986 classic. I always had heard people talk about this movie but I had never seen it. In this paper I will discuss the historical period Hoosiers is set in, compare and contrast major themes from the week, and evaluate the film based on its effectiveness. Hoosiers is a fictional movie that is actually based on real events in a small town in Indiana. It is based on a true story but does change some of the truths, as evidenced by the ESPN article. The message I gathered from the film was that anything is possible if you can work hard and accept change. The little town of Hickory was very set in its ways and uncooperative of the new basketball coach. Once the town and players learned to accept something different, the team flourished. The argument the film presents is to never count someone out. No matter how small a school or town is, hard work can trump talent and compete with the big boys. The message of acceptance resonates with the viewer and is most likely why Hoosiers is so highly regarded as a sports movie. The historical period that Hoosiers is set in is 1952 rural Indiana. In this time period, people are more centralized around common goals and the entire town knows when someone moves in. There are no...
Words: 1679 - Pages: 7
...Haylee Bowers Research Paper 11/20/13 In today’s society, cruelty towards animals is growing rapidly because people don’t understand the value of an animal’s life. People all around the world use and abuse animals as if it was some kind of national sport, and everybody is competing for the first place gold medal. Ever year millions of animals are being beaten and starved because of heartless people. Animal cruelty is a social issue that many people don’t understand. All the people who abuse animals don’t understand when they are harming an innocent animal are going to continue to do it until they are shown what they are doing wrong. Each type of abuse has certain patterns that scientists can study and find out why people commit the crimes they do. Animal cruelty is broken down into two categories, which are active and passive. Active cruelty is also known as NAI (non-accidental injury). NAI is when a person has malicious intent so fierce that they deliberately and intentionally cause harm to an animal. On the other hand with passive cruelty a person doesn’t intentionally cause harm to the animal, they simple neglect it by giving it no attention. While I was doing the research for this essay, I thought non-stop about how a human being could break a dogs leg, back, or even neck and feel no sympathy for the dog? Are some people in this world that heartless that they have no feelings for other living things? I wonder if you asked a person that has abused an animal if they...
Words: 1770 - Pages: 8
...“A Christian’s Perspective on Debt” The year 1990began a 10 year downward spiral into the pits of hell for me. After twenty years of marriage, my husband and I decided to get a divorce. I was left with nothing…no house, no furniture, a car I could not afford and the responsibility of providing for four children. All of a sudden, I was left alone to run a household and to raise four children singlehandedly. I was as green as grass, did not have a clue. I thought I could handle it all since I am a smart, educated, independent woman with a good job.I had excellent credit and a wallet full of credit cards. Never before had I been responsible for paying bills, my ex-husband paid foreverything. All of a sudden, I had a house note, car note, insurance, utilities, clothes, food, credit cards, and the list of bills just kept going on and onand on. Before I could get one bill paid the next one was in the mailbox. I knew that I had a decent job with a good pay but I was spending money faster than I was making it and pretty soon I did not make enough money to cover everything. Every time I turned around something was broken and needed to be repaired or one of the kids needed something. I began to usea credit card to purchase gas for my car to go to work. I used a different credit card to buy groceries. I paid tuition with a credit card. I bought books with a credit card. Pretty soon, I began to usea credit card to pay other credit cards. I was trapped in a vicious cycle of debt. I tried...
Words: 1989 - Pages: 8
...11/2/2011 Corporate Finance Efficient Market Hypothesis Reading: Chapter13, BMAM IIMB / PCN / PGP I / Corp Fin L01 CH 13 BMAM 1 Relationship among Three Different Information Sets All information relevant to a stock Information set of publicly available information Information set of past prices 13-2 IIMB / PCN / PGP I / Corp Fin L01 CH 13 BMAM 1 11/2/2011 The Different Types of Market Efficiency • Weak Form – Security prices reflect all information found in past prices and volume. • Semi-Strong Form – Security prices information. reflect all publicly available • Strong Form – Security prices reflect all information—public and private. 13-3 IIMB / PCN / PGP I / Corp Fin L01 CH 13 BMAM Relationship among Three Different Information Sets Strong Form Efficiency Semi strong form efficiency Weak Form Efficiency 13-4 IIMB / PCN / PGP I / Corp Fin L01 CH 13 BMAM 2 11/2/2011 Weak Form Market Efficiency • Security prices reflect all information found in past prices and volume. • If the weak form of market efficiency holds, then technical analysis is of no value. 13-5 IIMB / PCN / PGP I / Corp Fin L01 CH 13 BMAM Why Technical Analysis Fails Stock Price Investor behavior tends to eliminate any profit opportunity associated with stock price patterns. Sell Sell Buy Buy If it were possible to make big money simply by finding “the pattern” in the stock price movements, everyone would do it and the profits would be...
Words: 1550 - Pages: 7
...On April 14th, 2005, the United States House passed a business sought bankruptcy bill with a 302-126 vote, while the Senate had passed it on March 10th, with a 74-25 vote. Bankruptcy reform was initially introduced in 1998, but had difficulty in getting passed until now. This bill is a huge victory for credit card companies and retailers, but will undoubtedly affect millions of Americans in a negative manner (www.onlin.wsj.com/20050415). The bill is the first major change to the bankruptcy laws in twenty-seven years (www.pbs.org/3.25.05). The bill will make it harder for consumers to eliminate their debt with the use of bankruptcy. There are now new restrictions and a “means-test”, which determine if consumers can have their debts erased by Chapter 7 bankruptcy or Chapter 13 bankruptcy. The bill also makes attorneys liable for any inaccuracies in their clients’ bankruptcy filings. This bill has several controversial issues associated with it and will be explained later, along with the actual provisions of the bill. To understand the controversy, one must first understand what bankruptcy is and the difference between Chapter 7 and Chapter 13 bankruptcy filings. Chapter 7 bankruptcy is a liquidation proceeding in which the debtor turns over all of their non-exempt property to a bankruptcy trustee who converts it to cash to pay off the creditors. Within four months, the debtor is usually relieved of all obligations. In many cases, the debtor has no assets to lose, so Chapter...
Words: 2977 - Pages: 12
