a) Pavan Limited has made plans for the year 2022-23. It is estimated tha the Company will employ total assets of 25,00,000; 30% of asset. being financed by debt at an interest cost of 9%p.a. The direct cost fa the year are estimated at 15,00,000 and all other operating expense are estimated at 2,40,000. The sales revenue is estimated at 22,50,000. Tax rate is assumed to be 50%. Required to calculate: Net profit margin (ii)Return on assets
a) Pavan Limited has made plans for the year 2022-23. It is estimated tha the Company will employ total assets of 25,00,000; 30% of asset. being financed by debt at an interest cost of 9%p.a. The direct cost fa the year are estimated at 15,00,000 and all other operating expense are estimated at 2,40,000. The sales revenue is estimated at 22,50,000. Tax rate is assumed to be 50%. Required to calculate: Net profit margin (ii)Return on assets
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![a) Pavan Limited has made plans for the year 2022-23. It is estimated that
the Company will employ total assets of 25,00,000; 30% of assets
being financed by debt at an interest cost of 9%p.a. The direct cost for
the year are estimated at 15,00,000 and all other operating expenses
are estimated at 2,40,000. The sales revenue is estimated at
22,50,000. Tax rate is assumed to be 50%. Required to calculate: (i)
Net profit margin (ii)Return on assets](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb25ff0d1-9051-4cf8-a1b5-dbad924c57f5%2F6028b16c-df86-450c-96bf-d966701f2454%2F06udkcf_processed.png&w=3840&q=75)
Transcribed Image Text:a) Pavan Limited has made plans for the year 2022-23. It is estimated that
the Company will employ total assets of 25,00,000; 30% of assets
being financed by debt at an interest cost of 9%p.a. The direct cost for
the year are estimated at 15,00,000 and all other operating expenses
are estimated at 2,40,000. The sales revenue is estimated at
22,50,000. Tax rate is assumed to be 50%. Required to calculate: (i)
Net profit margin (ii)Return on assets
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