Q.1. The following figures relate to two companies…. 1 answer below »


Q.1. The subjoined figures tell to two companies.
P LTD. Q LTD.
(In Rs. Lakhs)
Sales 500 1,000
Variable consumes 200 300
---- -------
Contribution 300 700
Fixed consumes 150 400
---- -------
150 300
Interest 50 100
---- -------
Profit antecedently Tax 100 200
---- -------
You are required to:
(i) Estimate the open, financial and fully leverages for the two companies; and
Comment on the not-absolute miss position of them
Q.2. b. The subjoined items feel been extracted from the liabilities margin of the estimate subterfuge of XYZ Aggregation as on 31st December 2005.
Paid up important: Rs.
4, 00,000 equity portion-outs of Rs each 40, 00,000
Loans:
16% non-convertible debentures 20, 00,000
12% institutional loans 60, 00,000
Other advice environing the aggregation as apt is consecrated beneath:
31st Dec 2005 Dividend per portion-out earning per portion-out mediocre communicate appraisement per portion-out
7.2 10.50 65
You are required to estimate the weighted mediocre consume of important, using work values as weights and earnings/appraisement relative as the plea of consume of equity. Assume19.2% tax rate
Q. 3. The preform of consume-subterfuge of HLL provides the subjoined data:
Cost (per individual):
Raw symbolicals
Direct labour
Overheads
Total consume (per individual):
Profit
Selling appraisement
Rs.
52.0
19.5
39.0
110.5
19.5
130.0

The subjoined is the concomitant advice available:
Average raw symbolical in stock: one month; Mediocre symbolicals in process: half month; Credit known by suppliers: one month; Credit known to debtors: two months; Time lag in acquittal of hire: one and half weeks; Overheads: one month. One-fourth of sales are on specie plea. Specie estimate expected to be Rs. 12,000.
You are required to just a announcement showing the working important needed o finance a roll of immateriality of 70,000 individuals of output. You may postulate that origination is carried on evenly throughout the year and hire and overheads become alikely.
CASE STUDY
Brown Metals Ltd.
Please interpret the instance consider consecrated beneath and acceptance the questions consecrated at the end:
Brown Metals Ltd. is regarding the resuscitation of its corporeal channel which is past and feeble to engage the astride mound require for its fruit. The aggregation is faced delay two alternatives:
a) To buy channel A which is alike to the corporeal channel Or
b) To go in for channel B which is further high-priced and has fur elder parts.
The specie courses at the exhibit roll of operations underneathneath the two alternatives are as follows:
Cash course (Rs in lakhs) at the end of year
Yrs. 0 1 2 3 4 5
Machine A -25 - 5 20 14 14
Machine B -40 10 14 16 17 15
The Company’s consume of important is 10%. The Finance Director tries to evaluate the channels by cautious the subjoineds for twain the channels:
1. Net Exhibit Value
2. Profitability Index
3. Pay Back Period
4. Discounted Payback Period.
At the end of his calculations, at-last, the finance director is feeble to frame up his liking as to which channel to approve.
Q. You are required to frame these calculations and in the unsteady thereof, guide the finance director environing the suitability, or inadequately, of channel A or channel B.

Attachments: