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Question
Cino Inc. earned from its brake pads manufacturing unit revenue of $560,000 and depreciation and amortization for the unit was $50,000. The company sells its product to customers at a price of $100. Further, the financial statement reveals that the EBIT for the year was $80,000. The variable cost for each unit of brake pad is $60. What is the amount of fixed cost that leads to the EBIT as provided in the financial statement?A) $88,000
B) $90,000
C) $94,000
D) $105,000
Answer
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Related questions
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Q:
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Q:
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Q:
The claim lenders' hold on cash flows in a company with outstanding risky debt is often thought of as:
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B) holding a put option on the firm's assets.
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Q:
Bifive Homes, Inc., is a developer of planned residential communities. It has entered into an option contract with a land owner outside Austin, Texas. It will pay the land owner $100,000 for the option to buy the land in two years at a price of $20 million. During that time Bifive Homes will evaluate population and real estate trends in Austin. Its plan is to buy the land if real estate prices in Austin increase enough that developing the land would be worth more than the $20 million price. The $20 million purchase price resembles:
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Q:
When the value of the firm is above the face value of the debt:
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C) the stockholders default and the lenders receive the value of the firm.
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Q:
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B) the premium of a call option on the plant.
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D) the strike price of a call option the plant.
Q:
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Which of the following statements is true of a call option?
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Q:
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A) True
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A) True
B) False
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If a firm adds financial options to its debt securities, it will increase the interest expense to the firm.
A) True
B) False
Q:
Consider a call option on a stock with a strike price of $60. If the stock price at expiration is $50, the payoff from the call option is $10.
A) True
B) False