Question
A company makes sales of Rs. 1,00,000 and earns a profit
of Rs.8000. If the fixed cost incurred by it was Rs. 12,000 what is its PV ratio?Solution
Contribution = Profit + Fixed Cost = 12,000+8,000 =20,000 PV Ratio = Contribution/ Sales * 100 20,000 / 1,00,000 * 100 =20%
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