财务管理 英 第五章 杠杆.docx

财务管理 英 第五章 杠杆.docx

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财务管理英第五章杠杆

Chapter5

DiscussionQuestions

5-1.

Discussthevarioususesforbreak-evenanalysis.

Suchanalysisallowsthefirmtodetermineatwhatlevelofoperationsitwillbreakeven（earnzeroprofit）andtoexploretherelationshipbetweenvolume,costs,andprofits.

5-2.

Whatfactorswouldcauseadifferenceintheuseoffinancialleverageforautilitycompanyandanautomobilecompany?

Autilityisinastable,predictableindustryandthereforecanaffordtousemorefinancialleveragethananautomobilecompany,whichisgenerallysubjecttotheinfluencesofthebusinesscycle.Anautomobilemanufacturermaynotbeabletoservicealargeamountofdebtwhenthereisadownturnintheeconomy.

5-3.

Explainhowthebreak-evenpointandoperatingleverageareaffectedbythechoiceofmanufacturingfacilities（laborintensiveversuscapitalintensive）.

Alabor-intensivecompanywillhavelowfixedcostsandacorrespondinglylowbreak-evenpoint.However,theimpactofoperatingleverageonthefirmissmallandtherewillbelittlemagnificationofprofitsasvolumeincreases.Acapital-intensivefirm,ontheotherhand,willhaveahigherbreak-evenpointandenjoythepositiveinfluencesofoperatingleverageasvolumeincreases.

5-4.

Whatroledoesdepreciationplayinbreak-evenanalysisbasedonaccountingflows?

Basedoncashflows?

Whichperspectiveislongerterminnature?

Forbreak-evenanalysisbasedonaccountingflows,depreciationisconsideredpartoffixedcosts.Forcashflowpurposes,itiseliminatedfromfixedcosts.

Theaccountingflowsperspectiveislonger-terminnaturebecausewemustconsidertheproblemsofequipmentreplacement.

5-5.

Whatdoesrisktakinghavetodowiththeuseofoperatingandfinancialleverage?

Bothoperatingandfinancialleverageimplythatthefirmwillemployaheavycomponentoffixedcostresources.Thisisinherentlyriskybecausetheobligationtomakepaymentsremainsregardlessoftheconditionofthecompanyortheeconomy.

5-6.

Discussthelimitationsoffinancialleverage.

Debtcanonlybeuseduptoapoint.Beyondthat,financialleveragetendstoincreasetheoverallcostsoffinancingtothefirmaswellasencouragecreditorstoplacerestrictionsonthefirm.Thelimitationsofusingfinancialleveragetendtobegreatestinindustriesthatarehighlycyclicalinnature.

5-7.

Howdoestheinterestrateonnewdebtinfluencetheuseoffinancialleverage?

Thehighertheinterestrateonnewdebt,thelessattractivefinancialleverageistothefirm.

5-8.

Explainhowcombinedleveragebringstogetheroperatingincomeandearningspershare.

Operatingleverageprimarilyaffectstheoperatingincomeofthefirm.Atthispoint,financialleveragetakesoveranddeterminestheoverallimpactonearningspershare.AdelineationofthecombinedeffectofoperatingandfinancialleverageispresentedinTable5-6andFigure5-5.

5-9.

Explainwhyoperatingleveragedecreasesasacompanyincreasessalesandshiftsawayfromthebreak-evenpoint.

Atprogressivelyhigherlevelsofoperationsthanthebreak-evenpoint,thepercentagechangeinoperatingincomeasaresultofapercentagechangeinunitvolumediminishes.Thereasonisprimarilymathematical—aswemovetoincreasinglyhigherlevelsofoperatingincome,thepercentagechangefromthehigherbaseislikelytobeless.

5-10.

Whenyouareconsideringtwodifferentfinancingplans,doesbeingatthelevelwhereearningspershareareequalbetweenthetwoplansalwaysmeanyouareindifferentastowhichplanisselected?

Thepointofequalityonlymeasuresindifferencebasedonearningspershare.Sinceourultimategoalismarketvaluemaximization,wemustalsobeconcernedwithhowtheseearningsarevalued.Twoplansthathavethesameearningspersharemaycallfordifferentprice-earningsratios,particularlywhenthereisadifferentialriskcomponentinvolvedbecauseofdebt.

Chapter5

Problems

1.GatewayAppliancetoasterssellfor$20perunit,andthevariablecosttoproducethemis $15.Gatewayestimatesthatthefixedcostsare$80,000.

a.Computethebreak-evenpointinunits.

b.Fillinthetablebelow（indollars）toillustratethebreak-evenpointhasbeenachieved.

Sales

____________

–Fixedcosts

____________

–Totalvariablecosts

____________

Netprofit（loss）

____________

5-1.Solution:

GatewayAppliance

a.

b.Sales

$320,000（16,000units×$20）

–Fixedcosts

$80,000

–Totalvariablecosts

240,000（16,000units×$15）

Netprofit（loss）

$0

2.HazardousToysCompanyproducesboomerangsthatsellfor$8eachandhaveavariablecostof$7.50.Fixedcostsare$15,000.

a.Computethebreak-evenpointinunits.

b.Findthesales（inunits）neededtoearnaprofitof$25,000.

5-2.Solution:

TheHazardousToysCompany

a.