FIN501 Strategic Corporate Finance Module 4 Case Trident University

PART A (Quantitive Problems)

1. Suppose QuickCharge Corporation manufactures phone chargers. They sell their chargers for 20. Their fixed operating costs are 100,000 and their variable operating costs are 10 per charger. Currently they are selling 30,000 chargers per year. a) What will be QuickCharges EBIT in other words before the interest and taxes with a sales of 30,000? (A) EBIT Sales Variable cost Fixed cost EBIT 3000020 3000010 100000 200000 (B) What will be a QuickCharges breakeven point? Breakeven point Fixed cost/ (Price Variable cost) Breakeven point 100000 / (20-10) 10000 (C) Calculating the EBIT if QuickCharges sales increase 50% to 45,000...