Rahul has an amount of N 300,000 which is invested in a business. He desires 15% return on his fund. It is known from the past cost data analysis that fixed costs are N 150,000 per annum and variable costs of operation are 60% of sales. Determine sales volume to get 15% return. Also tell shut down point of the business, if he would spend N 50,000 even if business must be closed.

Rahul has an amount of N 300,000 which is invested in a business. He desires 15% return on his fund. It is known from the past cost data analysis that fixed costs are N 150,000 per annum and variable costs of operation are 60% of sales. Determine sales volume to get 15% return. Also tell shut down point of the business, if he would spend N 50,000 even if business must be closed.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 6P

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