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Commerce · Q1474

Accounting

Graduate and Post Graduate · Commerce · question 1474

Q1474

On the basis of the following information, what will be the EBIT corresponding to financial indifference point? Total capital outlay Rs. 60,00,000 Financing Plans 1. 100% Equity @ Rs. 10/- per share 2. Debt - equity ratio 2 : 1 Rate of interest 18% p.a., corporate tax rate 40%

A.
Rs. 10,00,000
B.
Rs. 12,00,000
C.
Rs. 10,80,000
Answer
D.
Rs. 12,80,000

Answer: Option C

Solution

Answer: Option C
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