A company has the capacity of production of 80000 units and presently it sells 20000 units at Rs 100 each. The demand is sensitive to selling price and it has been observed that every reduction of Rs 10 in selling price the demand is doubled. What should be the target cost at full capacity it profit margin on sales is taken at 25%? a. Rs 48 lakhs b. Rs 52 lakhs c. Rs 50 lakhs d. Rs 58 lakhs

A company has the capacity of production of 80000 units and presently it sells 20000 units at Rs 100 each. The demand is sensitive to selling price and it has been observed that every reduction of Rs 10 in selling price the demand is doubled. What should be the target cost at full capacity it profit margin on sales is taken at 25%? a. Rs 48 lakhs b. Rs 52 lakhs c. Rs 50 lakhs d. Rs 58 lakhs

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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