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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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