Casio ClassPad II fx-CP400 Examples User Manual download pdf (Page 37)

Chapter 11: Financial Application 37

1109 Break-Even Point

Your company is producing items with a unit variable cost ([VCU]) of $50/

unit and fixed costs ([FC]) of $100,000. The items will be sold for a sales price

([PRC]) of $100/unit.

What is the break-even point sales amount ([SBE]) and sales quantity ([QBE])

required for a profit ([PRF]) of $400,000?

Before performing the calculation, change the “Profit Amount/Ratio” setting to

“Amount (PRF)” and the “Break-Even Value” to “Quantity”.

1. Tap [Calc(2)] - [Break-Even Point].

2. Input the values below into the applicable fields.

PRC = 100, VCU = 50, FC = 100000, PRF = 400000

3. Tap [QBE] to obtain the sales quantity.

4. Tap [SBE] to obtain the break-even point sales amount.

1110 Margin of Safety

What is the margin of safety ([MOS]) when the sales amount ([SAL]) is

$1,200,000 and the break-even sales amount ([SBE]) is $1,000,000?

1. Tap [Calc(2)] - [Margin of Safety].

2. Input 1200000 into the [SAL] field and 1000000 into the [SBE] field, and then

tap [MOS].

1111 Operating Leverage

What is the degree of operating leverage for a company with sales ([SAL])

of $1,200,000, variable costs ([VC]) of $600,000, and fixed costs ([FC]) of

$200,000?

1. Tap [Calc(2)] - [Operating Leverage].

2. Input 1200000 into the [SAL] field, 600000 into the [VC] field, and 200000

into the [FC] field, and then tap [DOL].

1112 Financial Leverage

Calculate the financial leverage ([DFL]) for a company that earns $400,000

before interest and taxes ([EBIT]), $80,000 of which is paid to bondholders

([INT]).

1. Tap [Calc(2)] - [Financial Leverage].

2. Input 400000 into the [EBIT] field and 80000 into the [INT] field, and then tap

[DFL].

1113 Combined Leverage

Calculate the Combined Leverage ([DCL]) for a company with variable costs

([VC]) of $6,000, fixed costs ([FC]) of $2,000, and sales ([SAL]) of $12,000, of

which $1,000 is paid to bondholders ([INT]).

1. Tap [Calc(2)] - [Combined Leverage].

2. Input 12000 into the [SAL] field, 6000 into the [VC] field, 2000 into the [FC]

field, and 1000 into the [INT] field, and then tap [DCL].

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Casio ClassPad II fx-CP400 Examples User Manual Page 37