A firm has sales of Rs 75,00,000, variable cost of Rs 42,00,000 and fixed cost of Rs

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A firm has sales of Rs 75,00,000, variable cost of Rs 42,00,000 and fixed cost of Rs 6,00,000. It has a debt of Rs 45,00,000 at 9% and equity of Rs 55,00,000.

(i) What is the firm's ROI?,

(ii) Calculate OL, FL and CL. Are leverages favourable or unfavourable?, and (iii) At what level of EBIT and sales, EPS will be equal to zero?

Related Book For answer-question

Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

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Posted Date: May 01, 2022 09:00 PM

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A firm has sales of Rs 75,00,000, variable cost of Rs 42,00,000 and fixed cost of Rs

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i ROI PARTICULARS AMOUNT SALES 7500000 LESSVARIABLE COST 4200000 C... View the full answer

Foundations of Financial Management

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