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BRILLIANT’S T-20 Questions 495
Q.19. The following information is available for ABC and Co.:
EBIT ` 11,50,000
Profit before Tax> ` 5,10,000
Fixed Cost> ` 6,00,000
Calculate % change in EPS, if the sales are expected to be increased by 3%.
[See Illustration 4.3.9]
Q.20. A Co. wants to replace the manual operations by new machine. There are two alterna-
tive models of P and Q of the new machine. Using pay-back period, suggest the most
profitable investment. Ignore taxation.
Particulars Machine-P Machine-Q
Original Investment 9,000 18,000
Estimate life of the machine (Years) 4 5
Estimated saving in scrap 500 800
Estimated saving in wages 6,000 8,000
Additional cost of maintenance 800 1,000
Additional cost of supervision 1,200 1,800
[See Illustration 5.1.4]
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