Question
A firm uses 70% debt financing at 10% interest. Its ROE
rises despite flat operating profits. What explains this phenomenon?Solution
Increased ROE without rise in EBIT indicates positive financial leverage—use of debt to magnify returns to equity.
Akshay invested Rs. 2240 in two schemes P and Q in the respective ratio of 9:7. Scheme P and Q are offering simple interest at the rate of 10% per annum...
Atul has Rs.200 with him. He invested 40% of the amount at 5% p.a. for 6 years and rest at 20% p.a. for 5 years. Find the sum of simple interests receiv...
An amount is invested at a compound interest rate of 21% per annum, with compounding occurring once every 10 months. After 20 months, the interest earne...
- Anjali invests Rs. 28,000 in scheme 'C' and Rs. 22,000 in scheme 'D'. Scheme 'C' gives 14% interest per annum for 2 years and scheme 'D' gives 11% per annu...
The interest received on investing Rs. (6p - 200) on simple interest at 25% p.a. for 2 years is Rs. (2p + 400). Find the ratio (p - 200) :(p + 100)
A sum of money gets thrice in 10 years , in how many years it will be 27 times in CI?
Rs. 90Y when invested for 5 years at simple interest of 12% p.a., yields an interest of Rs. 2700. If Rs. 110Y is invested for 3 years at compound intere...
What is the simple interest on Rs. 8000 at the rate of 7.5% per annum for 4 years?
- Arun deposited Rs 18000 in PNB for 3 years and got a total amount of Rs 23400 whereas Varun deposited Rs 25000 in SBI and got a total interest of Rs 4000 a...
- If Rs. 8,000 grows to Rs. 10,960 in 2 years at simple interest, what is the yearly interest rate?
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