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Fundamentals of Financial Management, Third Edition by Vyuptakesh Sharan

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SOLVED NUMERICAL PROBLEMS
  1. Prepare income statement and find out the changes in EBIT and net income in 2007–08 over 2006–07 on the basis of the following details:

    Sales during 2006–07 amounted to Rs 4,00,000 that increased by 20% in the following year. The cost of goods accounted for 60% of the sale value during 2006–07 which, on account of economy measures, slumped to 55% in the following year. Operating expenses too fell from 10% to 8% of the sale value. But the amount of interest payment rose from Rs 25,000 to Rs 30,000 in 2007–08. Tax rate was constant at 30%.

    Solution

     

    Income Statement
      2006–07 2007–08

    Revenue from sales

    4,00,000
    4,80,000

        Less cost of goods

    2,40,000
    2,64,000

    Margin of contribution

    1,60,000 ...

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