A firm has a Degree of Operating Leverage (DOL) of 5 and Degree of Financial Leverage (DFL) of 4. The interest burden is ₹300 Lakhs, variable cost as a % to sales is 75%, and the effective tax rate is 45%. Its fixed cost
CS Executive · Financial and Strategic Management · PYQS · December 2019
A firm has a Degree of Operating Leverage (DOL) of 5 and Degree of Financial Leverage (DFL) of 4. The interest burden is ₹300 Lakhs, variable cost as a % to sales is 75%, and the effective tax rate is 45%. Its fixed cost is:
Answer & Explanation:
Correct Answer: Option (A)
Official answer key: (A).
Topics: Financial Management
Related Questions in this Topic
- Assume that a firm has accurately calculated the net cash flows relating to an investment proposal. If the net present v...
- A firm has EBIT of ₹ 50,000. Market value of 10% debt is ₹ 80,000 and overall capitalization rate is 20%. Market value o...
- A firm has inventory turnover of 4 and cost of goods sold is ₹ 7,50,000. With better inventory management, the inventory...
- 80% of sales of ₹ 12,00,000 of a firm are on credit. It has a Receivable Turnover of 8. What is the Average collection p...
- A Company's Raw material storage period is 20 days; Finished goods storage period is 25 days; Receivables (Debtors) coll...