Firm A has $10,000.00 in assets entirely financed with equity. Firm B has $10,000.00 in assets, but these assets are financed by $5,000.00 in debt (with 10%  rate of interest) and $5,000.00 in equity. Both firms sell 10.000 units of output at $2.50 per unit. The variable cost are $1.00, and fixed production cost are $12,000.00. What is the operating income (EBIT) for both firms?
asked Nov 22, 2012 in Word Problem Answers by kvboehm (120 points)

Your answer

Your name to display (optional):
Privacy: Your email address will only be used for sending these notifications.
Anti-spam verification:

To avoid this verification in future, please log in or register.
Welcome to, where students, teachers and math enthusiasts can ask and answer any math question. Get help and answers to any math problem including algebra, trigonometry, geometry, calculus, trigonometry, fractions, solving expression, simplifying expressions and more. Get answers to math questions. Help is always 100% free!
79,822 questions
83,639 answers
66,565 users