Question: please solve it in paper or write in chegg The promoters of a company are planning two different cost structures as follows: i) Variable cost

please solve it in paper or write in chegg The promoters

please solve it in paper or write in chegg

The promoters of a company are planning two different cost structures as follows: i) Variable cost 50% of sales, Fixed Cost Rs70 lacs Or ii) Variable Cost 60% of sales, Fixed Cost 70 lacs Projected average sales Rs. 170 lacs. They consider two alternative financing alternatives for the above: ( Equity Rs.50 lacs and Debt Rs.60 Lacs, or (ii) Equity Rs.30 lacs, Debt Rs.80 lacs, For the first alternative, interest rate is worked out to be 8% and for the second alternative it is 10%. Tax Rate is 25%.Which combination of alternatives is the best decision for investment. Calculate the leverage and comment

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