Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Management Expert

problem 1)a) The share capital of a company is Rs.8, 00, 000 with shares of face value Rs.10. It has a debt capital of Rs.5, 00, 000 at 12% interest rate. The sales of the company are 2, 50, 000 units per annum at a selling price of Rs.5 per unit and the variable cost per unit is Rs.3. The fixed cost is Rs.1, 00, 000 and tax rate is 50%. If the sales increase by 20% find out the percentage increase in EPS, degree of operating and financial leverages at the two output levels. Comment on the behavior of leverages when the production is increased by 20%.

b) Describe the following terms with appropriate exs.

• Non- operating surplus

• Intangible fixed assets

• Sundry creditors

• Fixed liabilities

• Prepaid expenses

problem 2)a) A company purchased a machine for Rs. 5,,00,000 having a zero salvage value and a discounted payback period of 7.5 years. The firm follows straight line method of depreciation at a rate of 10%. If the cash flows are evenly distributed and the tax rate is 40%, what is the annual PBT on the machine? Also find out the IRR and NBCR of the machine if the cost of capital is 12%.

b) Find out the cost of capital of a company that is employing equity capital and term loans in the ratio 3:2 and paying a constant dividend of 12.5% per year and an interest of 14% per year. The tax rate is 40%.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M96602

Have any Question? 


Related Questions in Financial Management

Manage finances within a budget projects-learning outline -

Manage Finances within a Budget Projects- Learning Outline - Within this resource, you will be covering the following key topics: Interpret and manage multiple budgets. Allocate budget resources. Monitor financial activi ...

Securities firms what are the functions of securities

Securities Firms : What are the functions of securities firms? Many securities firms employ brokers and dealers. Distinguish between the functions of a broker and those of a dealer, and explain how each is compensated.

Here is further information on the us and pugelovian

Here is further information on the U.S. and Pugelovian economies. a. What is the value of k for the United States in 1990? For Pugelovia? b. Show that the change in price level from 1990 to 2013 for each country is consi ...

Compare the impact of a given change in monetary policy in

Compare the impact of a given change in monetary policy in two economies that are similar in every way except that, in Economy A, the financial system has a large shadow banking system providing many alternatives to bank ...

Suppose the growth rate of potential output rises the

Suppose the growth rate of potential output rises. The behavior of the output gap (the fluctuations of output around potential) does not change. Do NBER recessions become more or less common? Explain.

Crappola hospital outside of outback ut has been thinking

Crappola Hospital outside of Outback, UT has been thinking about changing itsAc€?c payroll period from a bi weekly to a monthly. The administrator, Baskitcase says they currently have 600 employees with an annual payroll ...

Vigo vacations has 205 million in total assets 49 million

Vigo Vacations has $205 million in total assets, $4.9 million in notes payable, and $23.5 million in long-term debt. What is the debt ratio?

Journal entries and trial balanceon january 1 2014 alicia

Journal entries and trial balance On January 1, 2014, Alicia Masingale established Leopard Realty, which completed the following transactions during the month: a. Alicia Masingale transferred cash from a personal bank ac ...

What is the present value of each of the following income

What is the present value of each of the following income streams? a. $100 to be received at the end of each of the next three years b. $100 to be received at the end of each of the next three years plus an additional pa ...

Consider the monthly stock returns of sampp composite index

Consider the monthly stock returns of S&P composite index from January 1975 to December 2003 in Exercise 1.2. Answer the following questions: (a) What is the average annual log return over the data span? (b) Assume that ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate