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    Question

    If the Operating Ratio of a firm is 80% and Net Sales

    are ₹200 lakh, what is the Operating Profit?
    A ₹60 lakh Correct Answer Incorrect Answer
    B ₹50 lakh Correct Answer Incorrect Answer
    C ₹40 lakh Correct Answer Incorrect Answer
    D ₹30 lakh Correct Answer Incorrect Answer
    E ₹20 lakh Correct Answer Incorrect Answer

    Solution

    Operating Ratio = (Operating Expenses / Net Sales) × 100 So, Operating Profit = Net Sales × (1 – Operating Ratio) = ₹200 lakh × 20% = ₹40 lakh

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