Some Questions for You!

CFA Level I
#1
  1. If Jayco’s sales increases by 10%, Jayco’s EBIT increases by 15%. If Jayco’s EBIT increases by 10%, Jayco’s EPS increases by 12%. Jayco’s degree of operating leverage (DOL) and degree of financial leverage (DFL) are closest to: DOL DFL A) 1.8 1.2 B) 1.5 1.2 C) 1.8 1.4 2) Jayco, Inc. sells blue ink for $4 a bottle. The ink’s variable cost per bottle is $2. Ink has fixed cost of $10,000. What is Jayco’s breakeven point, in units? A) 7,000 B) 5,000 C) 6,000 3) Which o fthe following choices is a key determinant of operating leverage? A) Level and cost of debt B) The trade-off between fixed and variable costs C) The firm’s beta 4) 1) If Jayco’s sales increases by 10%, Jayco’s EBIT increases by 15%. If Jayco’s EBIT increases by 10%, Jayco’s EPS increases by 12%. Jayco’s degree of total leverage is closest to: A) 1.2 B) 1.7 C) 1.8 5) Jayco, Inc. sells 10,000 units at a price of $5 per unit. Jayco’s fixed costs are $8,000, interest expense is $2,000, variable costs are $3 per unit, and EBIT is $12,000. i) Jayco’s degree of operating leverage (DOL) and degree of financial leverage (DFL) are closest to: DOL DFL A) 1.67 1.56 B) 1.40 1.20 C) 1.67 1.20 ii) Jayco’s degree of total leverage (DTL) is closest to: A) 1.50 B) 1.75 C) 2.0 6) Atom Company’s operating income for selling 100,000 units is $60,000. Assume that Atom Company has annual interest expense of $18,000. If Atom’s EBIT increases by 10%, by how much will its earnings per share increase? A) 14.3% B) 10.5% C) 13.5%
#2

1.B 2.B 3.B 4.C 5.(i) C 5.(II)C 6)A

#3

Just wondering, what section are these questions from? I havent come across any similar types of ?s. Thanks,

#4

No one? This looks like Lv 2 stuff…

#5

It’s not from the level 1 curriculum. Maybe he just needs help with his homework for a finance class.