cash break even

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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GenoPearls Inc. has the following data for the year 2021:

·             Margin of safety is P 10,000
·             Variable expense of P 8,000
·             Fixed expense of P 4,000 (all cash)
·             Margin of safety ratio of 12.50%.
·             Selling price is P 10 per unit
·             Degree of operating leverage is 8
·             Degree of financial leverage is 4.5
·             EBIT (Earnings before interest and taxes) of P 4,000.
·             The company has total depreciable assets of P 82,000 with salvage value of P 2,000 and useful life of 20 years. (Straight line method was used in computation of annual depreciation)

 Compute the cash break even

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