Latest Activity In Study Groups

Join Your Study Groups

VU Past Papers, MCQs and More

We non-commercial site working hard since 2009 to facilitate learning Read More. We can't keep up without your support. Donate.

FIN622 Corporate Finance Assignment 01 Fall 2020 Solution / Discussion

Views: 370

Replies to This Discussion

Share the Assignment Questions & Discuss Here.... 

FIN622 Assignment 1 Fall 2020 Solution:

Download attachment for FIN622 assignment 1 solution file.

FIN622_Assignment_No_01_Solution_Fall_2020

FIN622 Corporate Finance | Assignment 1 Solution | Fall 2020 | vu virtual university |

FIN622 Corporate Finance | Assignment 1 Solution | Fall 2020

FIN622 – Corporate Finance

Assignment No. 1 - Fall 2020

 

Solution of requirement 1 and 2:

Variables

Rs.

Policy X

Policy Y

Recession

Normal

Boom

Recession

Normal

Boom

Sales

190,000

240,000

360,000

190,000

240,000

360,000

Variable Cost

133,000

168,000

252,000

161,500

204,000

306,000

Fixed Cost

60,000

60,000

60,000

20,000

20,000

20,000

Contribution Margin.(Sales-V.Cost)

57,000

72,000

108,000

28,500

36,000

54,000

Profit before interest and tax

(Contribution Margin-Final Cost)

(3,000)

12,000

48,000

8,500

16,000

34,000

Degree of operating leverage = Contribution margin/PBIT

(19)

6

2.25

3.35

2.25

1.59

 

Solution of requirement 3:

Economic Condition

Higher Degree of Operating Leverage

Recession

Policy Y

Normal

Policy X

Boom

Policy X

 

Solution of requirement 4:

Under policy X, the profitability of the company gets less affected due to changes in the economic condition because under policy X the variable cost is less and Profit is higher at BOOM economic condition.

 

 

 

FIN622 Assignment 1 Fall 2020 Solution:

Download attachment for FIN622 assignment 1 solution file.

FIN622_Assignment_No_01_Solution_Fall_2020

RSS

© 2021   Created by + M.Tariq Malik.   Powered by

Promote Us  |  Report an Issue  |  Privacy Policy  |  Terms of Service