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10 Cards in this Set
- Front
- Back
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Financial Risk
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Risk due to raising money with fixed income securities
High with high levels of debt financing |
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Financial Leverage
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the use of fixed income securities to finance a portion of assets
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Business RIsk
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Risk Due to Operations
Measured by variability of EBIT |
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Accounting Break Even
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sales volume where EBIT= 0
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Cash Break Even
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Sales Volume where operating cash flow = 0
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Financial Break Even
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Sales Volume where net present value = 0
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Night Shades, Inc manufacturers biotech sunglasses. The variable materials cost is $10.48 per unit, and the variable labor cost is $6.89 per unit.
What is the variable cost per unit? |
VC= 10.48 + 6.84
= $17.37 |
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Total Variable Cost
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Quantity * Cost Per Unit
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Fixed Costs
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are constant, regardless of output, over some time period
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Total costs
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fixed + variable
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