tag:blogger.com,1999:blog-67170787045974383492024-03-13T12:08:03.189-07:00MS-04 Accounting and Finance for ManagersAnonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.comBlogger89125tag:blogger.com,1999:blog-6717078704597438349.post-23671329755607981262011-06-20T02:32:00.001-07:002011-06-20T02:32:17.248-07:00Marginal costing<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify;"><b><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Marginal costing</span></u></b><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">: </span><span style="color: black; font-family: Arial; font-size: 9.0pt;">The technique of Marginal Costing is a definite improvement over the technique of Absorption Costing. According to this technique, only the variable costs are considered in calculating the cost of the product, while fixed costs are charged against the revenue of the period. The revenue arising from the excess of sales over variable costs is technically known as Contribution under Marginal Costing.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">The following example will help you in understanding the technique. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Example (i) :<span style="mso-spacerun: yes;"> </span></span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">From the following data, Let us prepare a statement of cost and profit according to Marginal Costing Technique. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-outline-level: 2; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Statement of Cost and Profit <o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">(According to Marginal Costing Technique) <o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><br />
</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: 5.4pt; mso-border-alt: solid black .5pt; mso-border-insideh: .5pt solid black; mso-border-insidev: .5pt solid black; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 160;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid black 1.0pt; mso-border-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 92.15pt;" valign="top" width="123"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><br />
</div></td> <td colspan="2" style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 99.2pt;" valign="top" width="132"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Product A<o:p></o:p></span></div></td> <td colspan="2" style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 99.25pt;" valign="top" width="132"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Product B<o:p></o:p></span></div></td> <td colspan="2" style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 94.95pt;" valign="top" width="127"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Product C<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 92.15pt;" valign="top" width="123"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Per Unit<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Total<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Per unit<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.65pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Total <o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.45pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Per unit<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.5pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Total<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 92.15pt;" valign="top" width="123"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Rs.<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Rs.<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Rs.<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.65pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Rs.<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.45pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Rs.<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.5pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Rs.<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.0pt; mso-yfti-irow: 3;"> <td style="border-top: none; border: solid black 1.0pt; height: 14.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 92.15pt;" valign="top" width="123"> <table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0in 5.4pt 0in 5.4pt;"><tbody>
<tr style="height: 13.15pt; mso-yfti-irow: 0; mso-yfti-lastrow: yes;"> <td style="height: 13.15pt; padding: 0in 5.4pt 0in 5.4pt;" valign="top"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Direct Material <o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; tab-stops: 63.3pt; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">3<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">3,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">4<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.65pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">4,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.45pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">5<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.5pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">5,000<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 92.15pt;" valign="top" width="123"> <table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0in 5.4pt 0in 5.4pt;"><tbody>
<tr style="height: 13.15pt; mso-yfti-irow: 0; mso-yfti-lastrow: yes;"> <td style="height: 13.15pt; padding: 0in 5.4pt 0in 5.4pt;" valign="top"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Direct Labour <o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">2<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">2,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">3<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.65pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">3,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.45pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">4<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.5pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">4,000<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 5;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 92.15pt;" valign="top" width="123"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Variable overheads<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">1<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">1,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">1<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.65pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">1,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.45pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">1<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.5pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">1,000<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 6;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 92.15pt;" valign="top" width="123"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Total marginal cost<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">6<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">6,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">8<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.65pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">8,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.45pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">10<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.5pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">10,000<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 7;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 92.15pt;" valign="top" width="123"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Contribution<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">4<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">4,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">7<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.65pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">7,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.45pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">10<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.5pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">10,000<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 8; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 92.15pt;" valign="top" width="123"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Selling price<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">10<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">10,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">15<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.65pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">15,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.45pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">20<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.5pt;" valign="top" width="63"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">20,000<o:p></o:p></span></div></td> </tr>
</tbody></table><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Thus, the total contribution from the three products A, B and C is Rs. 21,000. The profit will now be computed as follows: <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Total Contribution:<span style="mso-tab-count: 4;"> </span>Rs. 21,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Fixed costs:<span style="mso-tab-count: 5;"> </span>Rs.<span style="mso-spacerun: yes;"> </span>9,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-tab-count: 6;"> </span>--------------<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Profit<span style="mso-tab-count: 6;"> </span>Rs. 12,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-tab-count: 6;"> </span>---------------<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Example (ii): </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Let us prepare the statement profit or loss account for the following data by using Marginal costing technique.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><b><u><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Profit loss account for first year</span></u></b><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-tab-count: 1;"> </span></span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><o:p></o:p></span></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: 5.4pt; mso-border-alt: solid black .5pt; mso-border-insideh: .5pt solid black; mso-border-insidev: .5pt solid black; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 160;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid black 1.0pt; mso-border-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 99.25pt;" valign="top" width="132"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 99.2pt;" valign="top" width="132"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Rs.<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 80.5pt;" valign="top" width="107"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.1pt;" valign="top" width="63"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Rs.<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 99.25pt;" valign="top" width="132"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Direct Material<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">A<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">B<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">C<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Direct Labour<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">A<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">B<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">C<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Variable <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Fixed overheads<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 99.2pt;" valign="top" width="132"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">3,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">4,000<o:p></o:p></span></div><div style="border-bottom: solid windowtext 1.0pt; border: none; mso-border-bottom-alt: solid windowtext .75pt; padding: 0in 0in 1.0pt 0in;"> <div class="MsoNormal" style="border: none; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-border-bottom-alt: solid windowtext .75pt; mso-layout-grid-align: none; mso-padding-alt: 0in 0in 1.0pt 0in; padding: 0in; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">5,000<span style="mso-spacerun: yes;"> </span>12,000<o:p></o:p></span></div></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">2,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">3,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">4,000<span style="mso-spacerun: yes;"> </span>9,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">-----------------------------<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-spacerun: yes;"> </span>3,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-spacerun: yes;"> </span>9,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 80.5pt;" valign="top" width="107"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Sales<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Closing stock<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Loss <o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.1pt;" valign="top" width="63"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: right; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">--<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: right; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">24,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: right; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">9,000<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 2; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 99.25pt;" valign="top" width="132"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 99.2pt;" valign="top" width="132"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>33,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 80.5pt;" valign="top" width="107"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 47.1pt;" valign="top" width="63"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: right; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">33,000<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><b><u><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Profit loss account for second year<o:p></o:p></span></u></b></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: center; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-tab-count: 4;"> </span>Rs.<span style="mso-tab-count: 4;"> </span>Rs.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-tab-count: 1;"> </span>Opening stock<span style="mso-tab-count: 2;"> </span>24,000<span style="mso-tab-count: 2;"> </span>Sales<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-tab-count: 1;"> </span>Fixed overheads<span style="mso-tab-count: 2;"> </span><span style="mso-spacerun: yes;"> </span>9,000<span style="mso-tab-count: 2;"> </span>A<span style="mso-tab-count: 2;"> </span>10,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-tab-count: 6;"> </span>B<span style="mso-tab-count: 2;"> </span>15,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-tab-count: 1;"> </span>Profit <span style="mso-tab-count: 3;"> </span>12,000<span style="mso-tab-count: 2;"> </span>C<span style="mso-tab-count: 2;"> </span>20,000<span style="mso-tab-count: 2;"> </span>45,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-tab-count: 4;"> </span>---------<span style="mso-tab-count: 4;"> </span>--------<span style="mso-tab-count: 2;"> </span>---------<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-tab-count: 4;"> </span>45,000<span style="mso-tab-count: 5;"> </span><span style="mso-tab-count: 1;"> </span>45,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt;">The above statement shows that the company suffers a loss of Rs. 9,000 in the first year because of non-recovery of fixed overheads, while in the second year it makes a profit of Rs. 12,000. It may be seen from the two years ` Profit and Loss Accounts that the fixed cost of one year has not been carried forward to the next year, Thus, the profit and Loss Account gives a correct picture. </span><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com1tag:blogger.com,1999:blog-6717078704597438349.post-85113476591950825822011-06-20T02:31:00.001-07:002011-06-20T02:31:28.310-07:00Budgetary control system<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify;"><b><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Budgetary control system</span></u></b><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">: </span><span style="color: black; font-family: Arial; font-size: 9.0pt;">No system of planning can be successful without having an effective and efficient system of control. Budgeting is closely connected with control. The exercise of control in the organisation with the help of budgets is known as budgetary control. The process of budgetary control includes<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">(i) Preparation of various budgets <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">(ii) Continuous comparison of actual performance with budgetary performance and <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none; text-indent: -.5in;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><span style="mso-tab-count: 2;"> </span>(iii) Revision of budgets in the light of changed circumstances. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none; text-indent: -.5in;"><br />
</div><div class="Style13" style="margin-left: .5in; text-align: justify;"><span style="color: black; font-family: Arial; font-size: 9.0pt;">A system of budgetary control should not become rigid. There should be enough scope for flexibility to provide for individual initiative and drive. Budgetary control is an important device for making the organisation more efficient on all fronts. It is an important tool for controlling costs and achieving the overall objectives. <o:p></o:p></span></div><div class="Default"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Installing A Budgetary Control System: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Having understood the meaning and significance of budgetary control in an organisation, it will be useful for you to know how a budgetary control system can be installed in the organisation. This requires first of all, finding answers to the following questions in the context of an organisation: <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">What is likely to happen? <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">What can be made to happen? <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">What are the objectives to be achieved? <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">What are the constraints and to what extent their effects can be minimised? <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Having found answers to the above questions, the following steps may be taken for installing an effective system of budgetary control in an organisation. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Organisation for Budgeting: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">The setting up of a definite plan of organisation is the first step towards installing budgetary control system in an organisation. A, Budget Manual should be prepared giving details of the powers, duties, responsibilities and areas of operation of each executive in the organisation. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Responsibility for Budgeting: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">The responsibility for preparation and implementation of the budgets may be fixed as under: <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Budget Controller: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Although the Chief Executive is finally responsible for the budget programme, it is better if a large part of the supervisory responsibility is delegated to an official designated as Budget Controller or Budget Director. Such a person should have knowledge of the technical details of the business and should report directly to the President of the Chief Executive of the organisation. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Budget Committee: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">The Budget Controller is assisted in his work by the Budget Committee. The Committee may consist of Heads of various departments, viz., Production, Sales Finance, Personnel, Purchase, etc. with the Budget Controller as its Chairman. It is generally the responsibility of the Budget Committee to submit, discuss and finally approve the budget figures. Each head of the department should have his own Sub-committee with executives working under him as its members.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Fixation of the Budget Period: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">`Budget period' means the period for which a budget is prepared and employed. the budget period depends upon the nature of the business and the control techniques. For example, a seasonal industry will budget for each season, while an industry requiring long periods to complete work will budget for four, five or even larger number of years. However, it is necessary for control purposes to prepare budgets both for long as well as short periods. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Budget Procedures: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Having established the budget organisation and fixed the budget period, the actual work or budgetary control can be taken upon the following pattern: <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Key Factor: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">It is also termed as limiting factor. The extent of influence of this factor must first be assessed in order to ensure that the budget targets are met. It would be desirable to prepare first the budget relating to this particular factor, and then prepare the other budgets. We are giving below an illustrative list of key factors in certain industries. 69 Budgeting and Budgetary Control<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-autospace: none;"><br />
</div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 5.4pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 14.6pt; mso-yfti-irow: 0;"> <td style="height: 14.6pt; padding: 0in 5.4pt 0in 5.4pt; width: 196.1pt;" valign="top" width="261"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Industry </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><o:p></o:p></span></div></td> <td style="height: 14.6pt; padding: 0in 5.4pt 0in 5.4pt; width: 154.7pt;" valign="top" width="206"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Key factor </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;"><o:p></o:p></span></div></td> </tr>
<tr style="height: .2in; mso-yfti-irow: 1;"> <td style="height: .2in; padding: 0in 5.4pt 0in 5.4pt; width: 196.1pt;" valign="top" width="261"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Motor Car <o:p></o:p></span></div></td> <td style="height: .2in; padding: 0in 5.4pt 0in 5.4pt; width: 154.7pt;" valign="top" width="206"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Sales demand <o:p></o:p></span></div></td> </tr>
<tr style="height: .2in; mso-yfti-irow: 2;"> <td style="height: .2in; padding: 0in 5.4pt 0in 5.4pt; width: 196.1pt;" valign="top" width="261"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Aluminium <o:p></o:p></span></div></td> <td style="height: .2in; padding: 0in 5.4pt 0in 5.4pt; width: 154.7pt;" valign="top" width="206"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Power <o:p></o:p></span></div></td> </tr>
<tr style="height: .2in; mso-yfti-irow: 3;"> <td style="height: .2in; padding: 0in 5.4pt 0in 5.4pt; width: 196.1pt;" valign="top" width="261"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Petroleum Refinery <o:p></o:p></span></div></td> <td style="height: .2in; padding: 0in 5.4pt 0in 5.4pt; width: 154.7pt;" valign="top" width="206"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Supply of crude oil <o:p></o:p></span></div></td> </tr>
<tr style="height: .2in; mso-yfti-irow: 4;"> <td style="height: .2in; padding: 0in 5.4pt 0in 5.4pt; width: 196.1pt;" valign="top" width="261"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Electro-optics <o:p></o:p></span></div></td> <td style="height: .2in; padding: 0in 5.4pt 0in 5.4pt; width: 154.7pt;" valign="top" width="206"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Skilled technicians <o:p></o:p></span></div></td> </tr>
<tr style="height: .2in; mso-yfti-irow: 5; mso-yfti-lastrow: yes;"> <td style="height: .2in; padding: 0in 5.4pt 0in 5.4pt; width: 196.1pt;" valign="top" width="261"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Hydra power generation <o:p></o:p></span></div></td> <td style="height: .2in; padding: 0in 5.4pt 0in 5.4pt; width: 154.7pt;" valign="top" width="206"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Monsoon <o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none; text-indent: -.5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">The key factors should be correctly identified and examined. The key factors need not be of a permanent nature. In the long run, the management may overcome the key factors by introducing new products, by changing material mix or by working overtime or extra shifts etc. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Making a Forecast: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">A forecast is an estimate of the future financial conditions or operating results. Any estimation is based on consideration of probabilities. An estimate differs from a budget in that the latter embodies an operating plan of an organisation. A budget envisages a commitment to certain objectives or targets, which the management seeks to attain on the basis of the forecasts prepared. A forecast on the other hand is an estimate based on probabilities of an event. A forecast may be prepared in financial or physical terms for sales, production cost, or other resources required for business. Instead of just one forecast a number of alternative forecasts may be considered with a view to obtaining the most realistic, overall plan. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Preparing Budgets: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">After the forecasts have been finalised the preparation of budgets follows. The budget activity starts with the preparation of the sales budget. Then production budget is prepared on the basis of sales budget and the production capacity avail-able. Financial budget (i.e. cash or working capital budget) will be prepared on the basis of sales forecast and production budget. All these budgets are combined and coordinated into a master budget. The budgets may be revised in the course of the financial period if it becomes necessary to do so, in view of the unexpected developments, which have already taken place or are likely to take place. </span><span style="color: black; font-family: Arial; font-size: 9.0pt;">Choice between Fixed and Flexible Budgets: </span><span style="font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">A budget may be fixed or flexible. A fixed budget is based on a fixed volume of activity. It may lose its effectiveness in planning and controlling if the actual capacity utilisation is different from what was planned for any particular unit or time e.g. a month or a quarter, The flexible budget is more useful for changing levels of activity as it considers fixed and variable costs separately. Fixed costs, as you are aware, remain unchanged over a certain range of output. Such costs change when there is a change in capacity level. The variable costs change in direct pro-portion to output. If<span style="mso-spacerun: yes;"> </span>flexible budgeting approach is adopted, the budget controller can analyse the variance between actual costs and budgeted costs depending upon the actual level of activity attained during a period of time. This will be explained in detail a little later.<span style="color: black;"><o:p></o:p></span></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com1tag:blogger.com,1999:blog-6717078704597438349.post-46412857663406843562011-06-20T02:29:00.003-07:002011-06-20T02:29:57.825-07:00Performance budgeting:<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="Style15" style="margin-left: .5in; text-align: justify;"><b><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Performance budgeting</span></u></b><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">: Budget in the ordinary sense of the term, denotes the facts related to the planned income and expenditure prepared for a specific future date. It is prepared in the form of a statement expressed either in monetary terms or only in numbers, or both. </span><span style="color: black; font-family: Arial; font-size: 9.0pt;">Performance budgeting involves evaluation of the performance of the organisation in the context of both specific, as well as, overall objectives of the organisation. It presupposes a crystal clear perception of organisational objectives in general, and short-term business objectives as stipulated in the budget, in particular by each employee of the organisation, irrespective of his level. It thus, provides a definite direction to each employee and also a control mechanism to higher management. <o:p></o:p></span></div><div class="Default"><br />
</div><div class="Default" style="margin-left: .5in;"><span style="color: windowtext; font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">As per ICMA, “ The budget is a financial and or quantitative statement, prepared and approved prior to a defined period of time, of the policy to be pursed to be during that period for the purpose of attaining a given objective.</span><span style="font-family: Arial; font-size: 9.0pt;">”<o:p></o:p></span></div><div class="Default" style="margin-left: .5in; text-align: justify;"><br />
</div><div class="Default" style="margin-left: .5in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt;">As per the National Institute of Bank Management, Bombay the performance budget technique is “The processes of analysis, identifying, simplifying and crystallising specific performance objective of a job to be achieved over a period, within the framework of organisational objectives, the purposes and objectives of job. The technique is characterised by its specific direction towards the business objectives of the organisation.”<o:p></o:p></span></div><div class="Default" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">The Main objectives of PB are: (i) to coordinate the physical and financial aspects; (ii) to improve the budget formulation, review and decision-making at all levels of management (iii) to facilitate better appreciation and review by controlling authorities (legislature, Board of Trustees or Governors, etc) as the presentation is more purposeful and intelligible; (iv) to make more effective performance audit possible; and (v) to measure progress towards long-term objectives which are envisaged in a development plan. In performance budgeting (PB), precise detainment of job to be performed or services to be rendered is done. Secondly, the budget is prepared in terms of functional categories and their sub-division into programmes, activities, and projects. Thirdly, the budget becomes a comprehensive document. Since the financial and physical results are interwoven, it facilitates management control. Performance budgeting (or programme budgeting) has been designed to correct the shortcomings of traditional budgeting by emphasizing management's considerations/ approaches. Both the financial and physical aspects are incorporated into the budget. A performance budget presents the operations of an organisation in terms of functions, programmes, activities, and projects. The traditional (also known as line-item or object-account) budget in government enumerates estimated expenditures by type (and quantity) for a specified period of time, usually one year. The expenditure is classified by object; the personnel are listed by type of position; the budget is divided into sections according to organisational units, department sections; and the types of expenditure are listed by category. The necessity for linking the expenditures (or inputs in financial terms) to outputs (in physical terms), facilitating the evaluation of outcomes (or result of activities) cannot be overemphasized.</span><span style="color: black; font-family: Arial; font-size: 9.0pt;"> Performance budgeting requires preparation of periodic performance reports. Such reports compare budget and actual data, and show variances. Their preparation is greatly facilitated if the authority and responsibility for the incurrence of each cost element is clearly defined within the firm's organisational structure. In addition, the accounting system should be sufficiently detailed and coordinated to provide necessary data for reports designed for the particular use of the individuals or cost centres having primary responsibility for specific cost. The responsibility for preparing the performance budget of each department lies on the respective Department Head. Each Department Head will be supplied with a copy of the section of the master budget appropriate to his sphere. For example, the chief buyer will be supplied with the copy of the materials purchase budget so that he may arrange for purchase of necessary materials. Periodic reports from various sections of a department will be received by the departmental head that will submit a summary report about his department to the budget committee. The report may be daily, weekly or monthly, depending upon the size of business and the budget period. These reports will be in the form of comparison of budgeted and actual figures, both periodic and cumulative. The purpose of preparing these reports is to promptly inform about the deviations in actual and budgeted activity to the person who has the necessary authority and responsibility to take necessary action to correct the deviations from the budget.<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com1tag:blogger.com,1999:blog-6717078704597438349.post-15054636783048785962011-06-20T02:29:00.001-07:002011-06-20T02:29:22.000-07:00Zero base budgeting:<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><b><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Zero base budgeting</span></u></b><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">:</span><span style="color: black; font-family: Arial; font-size: 9.0pt;"> </span><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Zero Base Budgeting is a method of budgeting whereby all activities are revaluated each time a budget is formulated. It is an approach to budget review and evaluated that requires a manager to justify the resources requested for all activities and projects, including ongoing activities and projects, in rank order. Each functional budget start with the assumption that the function does not exist and it is at zero cost. In other words, it is an expenditure control device where without reference to the past budget or achievement each divisional head has to justify the requirements of funds for each head of expenditure and prepare the budget accordingly.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.35pt; margin-right: 0in; margin-top: 0in; tab-stops: 28.35pt; text-align: justify; text-indent: -28.35pt;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; tab-stops: 28.35pt; text-align: justify; text-indent: -28.35pt;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-tab-count: 2;"> </span>According to Leonard Merewit “Z.B.B is technique which compliments and links the existing planning, budgeting and review process. It identifies alternatives and efficient methods of utilizing limited resources and effective attainment of selected benefits. It is a flexible management approach which provides a credible rationale for reallocating resources by focusing on a systematic review and justification of the funding and performance level of correct programming or activities.”<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; tab-stops: 28.35pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; tab-stops: 28.35pt; text-align: justify; text-indent: -28.35pt;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-tab-count: 2;"> </span>The budgeting function starts from zero and not on the basis of trends or historical figures adjusted for inflation and other conditions. It starts from the basic premise that the budget for the next year is zero and every process or expenditure has then to be justified in its entity in order to be included in the next year’s budget. Important point of this Budget is that the burden of proof thus shifts to each manager to justify why the money sho0uld be spent as all and to indicate what would happen if the proposed activities are not carried out and no money is spent.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.35pt; margin-right: 0in; margin-top: 0in; tab-stops: 28.35pt; text-align: justify; text-indent: -28.35pt;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.35pt; margin-right: 0in; margin-top: 0in; tab-stops: 28.35pt; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-tab-count: 1;"> </span>Steps involved in Zero Base Budgeting:<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo1; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(i)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Corporate objective should be established and laid down in details.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo1; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(ii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Decision units are identified by dividing the organisation according to functions or departments.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo1; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(iii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">The activity of each function or department is described, analysed and documented.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo1; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(iv)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">The targets and objectives of each activity are clearly determined ignoring existing budget.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo1; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(v)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">The performance assessment and measurement criteria for each activity are clearly defined.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo1; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(vi)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Each separate activity of the organisation is described in decision package.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo1; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(vii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Each activity or decision package is evaluated and ranked by cost benefit analysis.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo1; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(viii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Available resources are directed towards alternatives in order of priority to ensure optimum results.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.35pt; margin-right: 0in; margin-top: 0in; tab-stops: 28.35pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.35pt; margin-right: 0in; margin-top: 0in; tab-stops: 28.35pt; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-tab-count: 1;"> </span>The advantages of Z.B.B. are as follows:<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo2; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(i)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">It provides a systematic approach for the evaluation of different activities and ranks then in order of preference for the allocation of scarce resources.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo2; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(ii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">It adds psychological impetus to employ to avoid wasteful expenditure.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo2; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(iii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">It is planning tool for management which helps in identification of wasteful and obsolescent items of expenditure.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo2; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(iv)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">It renders greater flexibility on the top-level management in the allocation of available financial resources while choosing between different levels of particular activity.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo2; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(v)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">It ensures the optimum use of available resources as the allocation is based on raking of the competing claims of funds by their relative cost benefit analysis.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo2; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(vi)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Under it each activity is thoroughly examined and justified.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo2; tab-stops: 28.35pt; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(vii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Since this system requires participation of all manages in preparation of budgets, responsibility of all levels of management in successful execution of budgetary system can be ensured. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.35pt; margin-right: 0in; margin-top: 0in; tab-stops: 28.35pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; tab-stops: 28.35pt; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">All above benefits through implementation of zero base budgeting makes the managers to work more efficiently and effectively in decision making problems.<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-42132783309707316102011-06-20T02:28:00.002-07:002011-06-20T02:28:35.784-07:00What is capital structure? Discuss the determinants of capital structure.<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">What is capital structure? Discuss the determinants of capital structure.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify; text-indent: -.5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Ans:<span style="mso-tab-count: 1;"> </span><b><u>Capital structure</u></b>: It </span><span style="color: black; font-family: Arial; font-size: 9.0pt;">represents the total long-term investment in a business firm. It includes funds raised through ordinary and preference shares, bonds, debentures, term loans from financial institutions, etc. Any earned revenue and capital surpluses are included.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify; text-indent: -.5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify;"><b><u><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Capital Structure Planning</span></u></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">: Decision regarding what type of capital structure a company should have is of critical importance because of its potential impact on profitability and solvency. The small companies often do not plan their capital structure. The capital structure is allowed to develop without any formal planning. These companies may do well in the short-run, however, sooner or later they face considerable difficulties. The unplanned capital structure does not permit an economical use of funds for the company. A company should therefore plan its capital structure in such a way that it derives maximum advantage out of it and is able to adjust more easily to the changing conditions. Instead of following any scientific procedure to find an appropriate proportion of different types of capital which will minimise the cost of capital and maximise the market value, a company may just either follow what other comparable companies do regarding capital structure or may consult some institutional lender and follow its advice. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Theoretically, a company should plan an optimum capital structure in such a way that the market value of its shares is maximum. The value will be maximised when the marginal real cost of each source of funds is the same. In general, the discussion on the issue of optimum capital structure is highly theoretical. The determination of an optimum capital structure in practice is a formidable task, and we have to go beyond the theory. That is why, perhaps, significant variations among industries and among' different companies within the same industry regarding capital structure are found. A number of factors influence the capital structure decision of a company. The judgement of the person or group of persons making the capital structure decision plays a crucial role. Two similar companies can have different capital structures if the decision makers differ in their judgement about the significance of various factors. These factors are highly psychological, complex and qualitative and do not always follow the accepted theory. Capital markets are not perfect and the decision has to be taken with imperfect knowledge and consequent risk. You might have become interested in identifying some of the important factors which influence the planning of the capital structure in practice. However, before we discuss these factors let us examine the features of an appropriate capital structure in the next section.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify;"><br />
</div><div class="Style2" style="margin-left: .5in; text-align: justify;"><b><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Determinants of capital structure</span></u></b><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">: </span><span style="color: black; font-family: Arial; font-size: 9.0pt;">capital structure should be designed very carefully. The management of the company should set a target capital structure and the subsequent financing decisions should be made with a view to achieve the target capital structure. Once a company has been formed and it has been in existence for some years, the financial manager then has to deal with the existing capital structure. The company may need funds to finance its activities continuously. Every time the funds have to be procured, the financial manager weighs the pros and cons of various sources of finance and selects most advantageous sources keeping in view the target capital structure: Thus the capital structure decision is a continuous one and has to be taken whenever a firm needs additional finance. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">The factors to be considered whenever a capital structure decision is taken are: (i) Financial Leverage or Trading on equity, (ii) Cost of capital, (iii) Cash flow, (iv) Control, (v) Flexibility, (vi) Size of the company, (vii) Marketability, and (viii) Floatation costs. Let it’s briefly explain these factors. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">(i)Financial Leverage or Trading on Equity: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">The use of sources of finance with a fixed cost, such as debt and preference share capital, to finance the assets of the company is known as <b>financial leverage </b>or <b>trading on equity. </b>If the assets financed by debt yield a return greater than the cost of the debt, the earnings per share will increase without an increase in the owners' investment. Similarly, the earnings per share will also increase if preference share capital is used to acquire assets. But the leverage impact is felt more in case of debt because (i) the cost of debt is usually lower than the cost of preference share capital, and (ii) the interest paid on debt is a deductible charge from profits for calculating the taxable income while dividend on preference shares is not. Because of its effect on the earnings per share, financial leverage is one of the important considerations in planning the capital structure of a company. The companies with high level of the Earnings Before Interest and Taxes (EBIT) can make profitable use of the high degree of leverage to increase return on the shareholders' equity. One common method of examining the impact of leverage is to analyse the relationship between Earnings Per Share (BPS) at various possible levels of EBIT under alternative methods of financing. The EBIT-EPS analysis is one important tool in the hands of the financial manager to get an insight into the firm's capital structure management. He can consider the possible fluctuations in EBIT and examine their impact on EPS under different financing plans.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">(ii) Cost of Capital: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Measuring the costs of various sources of funds is a complex subject and needs a separate treatment. Needless to say that it is desirable to minimise the cost of capital. Hence, cheaper sources should be preferred, other things remaining the same. The cost of a source of finance is the minimum return expected by its suppliers. The expected return depends on the degree of risk assumed by investors. A high degree of risk is assumed by shareholders than debt-holders. In the case of debt-holders, the rate of interest is fixed and the company is legally bound to pay interest, whether it makes profits or not. For shareholders the rate of dividend is not fixed and the Board of Directors has no legal obligation to pay dividends even if the profits have been made by the company. The loan of debt-holders is returned within a prescribed period, while shareholders can get back their capital only when the company is wound up. This leads one to conclude that debt is a cheaper source of funds than equity. The tax deductibility of interest charges further reduces the cost of debt. The preference share capital is cheaper than equity capital, but is not as cheap as debt is. Thus, in order to minimise the overall cost of capital, a company should employ a large amount of debt.<o:p></o:p></span></div><div class="Style2" style="margin-left: .5in; text-align: justify;"><br />
</div><div class="Style2" style="margin-left: .5in; text-align: justify;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt;">(iii) Cash Flow: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt;">One of the features of a sound capital structure is conservation. Conservation does not mean employing no debt or a small amount of debt. Conservatism is related to the assessment of the liability for fixed<sub><span style="mso-text-raise: -2.0pt; position: relative; top: 2.0pt;"> </span></sub>charges, created by the use of debt or preference capital in the capital structure in the context of the firm's ability to generate cash to meet these fixed charges. The fixed charges of a company include payment of interest, preference dividend and principal. The amount of fixed charges will be high if the company employs a large amount of debt or preference capital. Whenever a company thinks of raising additional debt, it should analyse its expected future cash flows to meet the fixed charges. It is obligatory to pay interest and return the principal amount of debt. If a company is not able to generate enough cash to meet its fixed obligations, it may have to face financial insolvency. The companies which expect large and stable cash inflows can employ a large amount of debt in their capital structure. It is somewhat risky to employ sources of capital with fixed charges for companies whose cash inflows are unstable or unpredictable. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">(iv) Control: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">In designing the capital structure, sometimes the existing management is governed by its desire to continue control over the company. The existing management team may not only what to be elected to the Board of Directors but may also desire to manage the company without any outside interference. The ordinary shareholders have the legal right to elect the directors of the company. If the company issues new shares, there is a risk of loss of control. This is not a very important consideration in case of a widely held company. The shares of such a company are widely scattered. Most of the shareholders are not interested in taking active part in the company's management. They do not have the time and urge to attend the meetings. They are simply interested in dividends and appreciation in the price of shares. The risk of loss of control can almost be avoided by distributing shares widely and in small lots. Maintaining control however could be a significant question in the case of a closely held company. A shareholder or a group of shareholders could purchase all or most of the new shares and thus control the company. Fear of having to share control and thus being interfered by others often delays the decision of the closely held companies to go public. To avoid the risk of loss of control the companies may issue preference shares or raise debt capital. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">(v) Flexibility: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Flexibility means the firm's ability to adapt its capital structure to the needs of the changing conditions. The capital structure of a firm is flexible if it has no difficulty in changing its capitalisation or sources of funds. Whenever needed the company should be able to raise funds without undue delay and cost to finance the profitable investments. The company should also be in a position to redeem its preference capital or debt whenever warranted by future conditions. The financial plan of the company should be flexible enough to change the composition of the capital structure. It should keep itself in a position to substitute one form of financing for another to economise on the use of funds. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">(vi) Size of the Company: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">The size of a company greatly influences the availability of funds from different sources. A small company may often find it difficult to raise long-term loans. If somehow it manages to obtain a long-term loan, it is available at a high rate of interest and on inconvenient terms. The highly restrictive covenants in loans agreements of small companies make their capital structure quite inflexible. The management thus cannot run business freely. Small companies, therefore, have to depend on owned capital and retained earnings for their long-term funds. </span><span style="color: black; font-family: Arial; font-size: 9.0pt;">A large company has a greater degree of flexibility in designing its capital structure. It can obtain loans at easy terms and can also issue ordinary shares, preference shares and debentures to the public. A company should make the best use of its size in planning the capital structure.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">(vii) Marketability: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Marketability here means the ability of the company to sell or market particular type of security in a particular period of time which in turn depends upon -the readiness of the investors to buy that security. Marketability may not influence the initial capital structure very much but it is an important consideration in deciding the appropriate timing of security issues. At one time, the market favours debenture issues and at another time, it may readily accept ordinary share issues. Due to the changing market sentiments, the company has to decide whether to raise funds through common shares or debt. If the share market is depressed, the company should not issue ordinary shares but issue debt and wait to issue ordinary shares till the share market revives. During boom period in the share market, it may not be possible for the company to issue debentures successfully. Therefore, it should keep its debt capacity unutilised and issue ordinary<b><sub><span style="mso-text-raise: -2.0pt; position: relative; top: 2.0pt;">4</span></sub></b>shares to raise finances. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">(viii) Floatation Costs: </span></b><span style="color: black; font-family: Arial; font-size: 9.0pt; mso-bidi-language: TE;">Floatation costs are incurred when the funds are raised. Generally, the cost of floating a debt is less than the cost of floating an equity issue. This may encourage a company to use debt rather than issue ordinary shares. If the owner's capital is increased by retaining the earnings, no floatation costs are incurred. Floatation cost generally is not a very important factor influencing the capital structure of a company except in the case of small companies.<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com8tag:blogger.com,1999:blog-6717078704597438349.post-51122166350362937072011-06-20T02:28:00.000-07:002011-06-20T02:28:04.689-07:00Calculate the NPV and IRR of each project.<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify; text-indent: -.5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">A company is considering to select a project out of the two mutually exclusive projects. The company’s cost of capital is 10% and the net after tax cash flow of the project are as follows:<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify; text-indent: -.5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Year<span style="mso-tab-count: 2;"> </span><span style="mso-spacerun: yes;"> </span>0<span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>1<span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>2<span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>3<span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>4<span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>5<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Project<span style="mso-spacerun: yes;"> </span>X (Rs.)<span style="mso-tab-count: 1;"> </span>2,00,000<span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>35,000<span style="mso-spacerun: yes;"> </span>80,000<span style="mso-spacerun: yes;"> </span>90,000<span style="mso-spacerun: yes;"> </span>75,000<span style="mso-spacerun: yes;"> </span>20,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Project Y (Rs.)<span style="mso-spacerun: yes;"> </span>2,00,000<span style="mso-spacerun: yes;"> </span>2,18,000<span style="mso-spacerun: yes;"> </span>10,000<span style="mso-spacerun: yes;"> </span>10,000<span style="mso-spacerun: yes;"> </span>4,000<span style="mso-spacerun: yes;"> </span>3,000<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(i)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Calculate the NPV and IRR of each project.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(ii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">State with reasons which project you would recommend<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 1.0in; margin-right: 0in; margin-top: 0in; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">The discount factors are as follows:<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Year<span style="mso-tab-count: 2;"> </span><span style="mso-spacerun: yes;"> </span>0<span style="mso-tab-count: 1;"> </span> 1<span style="mso-tab-count: 1;"> </span> 2<span style="mso-tab-count: 1;"> </span> 3<span style="mso-tab-count: 1;"> </span>4<span style="mso-tab-count: 1;"> </span> 5<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Discount factor <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">At 10%<span style="mso-tab-count: 2;"> </span><span style="mso-spacerun: yes;"> </span>1<span style="mso-tab-count: 1;"> </span> 0.91<span style="mso-spacerun: yes;"> </span>0.83<span style="mso-spacerun: yes;"> </span>0.75<span style="mso-spacerun: yes;"> </span>0.68<span style="mso-spacerun: yes;"> </span>0.62<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">At 20%<span style="mso-tab-count: 2;"> </span><span style="mso-spacerun: yes;"> </span>1<span style="mso-tab-count: 1;"> </span> 0.83<span style="mso-spacerun: yes;"> </span>0.69<span style="mso-spacerun: yes;"> </span>0.58<span style="mso-spacerun: yes;"> </span>0.48<span style="mso-spacerun: yes;"> </span>0.41<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Ans:<span style="mso-tab-count: 1;"> </span>(i)<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 1;"> </span><u>Net Present Value at 20%</u>:<o:p></o:p></span></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; mso-border-alt: solid black .5pt; mso-border-insideh: .5pt solid black; mso-border-insidev: .5pt solid black; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-table-layout-alt: fixed; mso-yfti-tbllook: 160;"><tbody>
<tr style="height: 5.55pt; mso-yfti-irow: 0;"> <td rowspan="2" style="border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Year<o:p></o:p></span></div></td> <td colspan="3" style="border-left: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 184.25pt;" valign="top" width="246"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Project X<o:p></o:p></span></div></td> <td colspan="3" style="border-left: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 158.75pt;" valign="top" width="212"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Project Y<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 1;"> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 77.95pt;" valign="top" width="104"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Net Cash income (Rs.)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Discount<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Factor<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">PV<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Rs.<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.8pt;" valign="top" width="85"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Net Cash income (Rs.)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.1pt;" valign="top" width="65"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Discount<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Factor<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">PV<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Rs.<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 2;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 77.95pt;" valign="top" width="104"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,00,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,00,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.8pt;" valign="top" width="85"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,00,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.1pt;" valign="top" width="65"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,00,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 3;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 77.95pt;" valign="top" width="104"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">35,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.83<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">29050<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.8pt;" valign="top" width="85"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,15,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.1pt;" valign="top" width="65"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.83<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1,78,450<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 4;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 77.95pt;" valign="top" width="104"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">80,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.69<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">55200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.8pt;" valign="top" width="85"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">10,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.1pt;" valign="top" width="65"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.69<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">6,900<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 5;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">3<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 77.95pt;" valign="top" width="104"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">90,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.58<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">52200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.8pt;" valign="top" width="85"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">10,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.1pt;" valign="top" width="65"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.58<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">5,800<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 6;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">4<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 77.95pt;" valign="top" width="104"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">75,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.48<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">36000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.8pt;" valign="top" width="85"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">4000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.1pt;" valign="top" width="65"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.48<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1,920<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 7;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">5<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 77.95pt;" valign="top" width="104"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">20,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.41<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.8pt;" valign="top" width="85"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">3,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.1pt;" valign="top" width="65"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.41<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1,230<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 8; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 77.95pt;" valign="top" width="104"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">3,80,0650<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.8pt;" valign="top" width="85"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.1pt;" valign="top" width="65"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">3,94,300<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Net Present Value at 10%</span></u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">:<o:p></o:p></span></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; mso-border-alt: solid black .5pt; mso-border-insideh: .5pt solid black; mso-border-insidev: .5pt solid black; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 160;"><tbody>
<tr style="height: 5.55pt; mso-yfti-irow: 0;"> <td rowspan="2" style="border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 14.2pt;" valign="top" width="19"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Year<o:p></o:p></span></div></td> <td colspan="3" style="border-left: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 186.7pt;" valign="top" width="249"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Project X<o:p></o:p></span></div></td> <td colspan="3" style="border-left: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 184.65pt;" valign="top" width="246"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Project Y<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 1;"> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 70.85pt;" valign="top" width="94"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Net Cash income (Rs.)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 54.45pt;" valign="top" width="73"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Discount<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Factor<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 61.4pt;" valign="top" width="82"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">PV<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Rs.<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.45pt;" valign="top" width="91"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Net Cash income (Rs.)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 60.7pt;" valign="top" width="81"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Discount<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Factor<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 55.5pt;" valign="top" width="74"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">PV<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Rs.<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 2;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 14.2pt;" valign="top" width="19"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 70.85pt;" valign="top" width="94"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,00,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 54.45pt;" valign="top" width="73"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 61.4pt;" valign="top" width="82"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,00,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.45pt;" valign="top" width="91"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,00,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 60.7pt;" valign="top" width="81"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 55.5pt;" valign="top" width="74"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,00,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 3;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 14.2pt;" valign="top" width="19"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 70.85pt;" valign="top" width="94"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">35,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 54.45pt;" valign="top" width="73"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.91<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 61.4pt;" valign="top" width="82"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">31850<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.45pt;" valign="top" width="91"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,15,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 60.7pt;" valign="top" width="81"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.91<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 55.5pt;" valign="top" width="74"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1,95,650<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 4;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 14.2pt;" valign="top" width="19"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 70.85pt;" valign="top" width="94"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">80,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 54.45pt;" valign="top" width="73"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.83<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 61.4pt;" valign="top" width="82"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">66,400<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.45pt;" valign="top" width="91"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">10,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 60.7pt;" valign="top" width="81"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.83<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 55.5pt;" valign="top" width="74"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8300<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 5;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 14.2pt;" valign="top" width="19"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">3<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 70.85pt;" valign="top" width="94"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">90,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 54.45pt;" valign="top" width="73"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.75<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 61.4pt;" valign="top" width="82"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">67500<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.45pt;" valign="top" width="91"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">10,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 60.7pt;" valign="top" width="81"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.75<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 55.5pt;" valign="top" width="74"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">7500<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 6;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 14.2pt;" valign="top" width="19"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">4<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 70.85pt;" valign="top" width="94"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">75,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 54.45pt;" valign="top" width="73"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.68<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 61.4pt;" valign="top" width="82"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">51000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.45pt;" valign="top" width="91"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">4000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 60.7pt;" valign="top" width="81"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.68<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 55.5pt;" valign="top" width="74"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2720<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 7;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 14.2pt;" valign="top" width="19"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">5<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 70.85pt;" valign="top" width="94"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">20,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 54.45pt;" valign="top" width="73"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.62<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 61.4pt;" valign="top" width="82"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">12400<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.45pt;" valign="top" width="91"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">3,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 60.7pt;" valign="top" width="81"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">0.62<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 55.5pt;" valign="top" width="74"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1860<o:p></o:p></span></div></td> </tr>
<tr style="height: 5.55pt; mso-yfti-irow: 8; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 14.2pt;" valign="top" width="19"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 70.85pt;" valign="top" width="94"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 54.45pt;" valign="top" width="73"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 61.4pt;" valign="top" width="82"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">4,29,150<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.45pt;" valign="top" width="91"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 60.7pt;" valign="top" width="81"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.55pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 55.5pt;" valign="top" width="74"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">4,16,030<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-tab-count: 1;"> </span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-tab-count: 1;"> </span><u>Internal Rate of Return</u>: IRR = LRD + </span>NPR<span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-spacerun: yes;"> </span>x R / PV<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>LRD = Lower rate of discount<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>NPVR = Net present value at lower rate of discount<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>PV = Difference in present value of lower and higher<o:p></o:p></span></div><span style="font-family: Arial; font-size: 9.0pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-style: italic; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><span style="mso-tab-count: 1;"> </span>R = Difference between two rates of discount</span></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-33972309380329291492011-06-20T02:26:00.000-07:002011-06-20T02:26:36.115-07:00alculate: (i) Break-even sales of the merged plant and the capacity utilization at that stage. (ii) Profitability of the merged plant at 80% capacity utilization. (iii) Sales turnover of the merged plant to earn a profit of Rs. 75 lakhs.<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Two manufacturing companies which have the following operating details decide to merge:<o:p></o:p></span></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; mso-border-alt: solid black .5pt; mso-border-insideh: .5pt solid black; mso-border-insidev: .5pt solid black; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 160;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid black 1.0pt; mso-border-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 170.1pt;" valign="top" width="227"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Particulars<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 80.4pt;" valign="top" width="107"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Company No. 1<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 82.65pt;" valign="top" width="110"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Company No. 2<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 170.1pt;" valign="top" width="227"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Capacity utilization<span style="mso-spacerun: yes;"> </span>%<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 80.4pt;" valign="top" width="107"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">90<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 82.65pt;" valign="top" width="110"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">60<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 170.1pt;" valign="top" width="227"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Sales<span style="mso-spacerun: yes;"> </span>(Rs. Lakhs)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 80.4pt;" valign="top" width="107"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">540<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 82.65pt;" valign="top" width="110"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">300<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 170.1pt;" valign="top" width="227"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Variable cost<span style="mso-spacerun: yes;"> </span>(Rs. Lakhs)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 80.4pt;" valign="top" width="107"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">396<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 82.65pt;" valign="top" width="110"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">225<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 4; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 170.1pt;" valign="top" width="227"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Fixed cost<span style="mso-spacerun: yes;"> </span>(Rs. Lakhs)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 80.4pt;" valign="top" width="107"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">80<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 82.65pt;" valign="top" width="110"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">50<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Assuming that the proposal is implemented calculate: (i) Break-even sales of the merged plant and the capacity utilization at that stage. (ii) Profitability of the merged plant at 80% capacity utilization. (iii) Sales turnover of the merged plant to earn a profit of Rs. 75 lakhs. (iv) When the merged plant is working at a capacity to earn a profit of Rs. 75 lakhs what percentage increase in selling price is required to sustain an increase of 5% in fixed overheads. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><br />
</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Ans:<span style="mso-tab-count: 1;"> </span>(i) Break- even point in terms of sales value = Fixed cost * </span><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>QUOTE </span><![if gte vml 1]><v:shapetype
id="_x0000_t75" coordsize="21600,21600" o:spt="75" o:preferrelative="t"
path="m@4@5l@4@11@9@11@9@5xe" filled="f" stroked="f"> <v:stroke joinstyle="miter"/> <v:formulas> <v:f eqn="if lineDrawn pixelLineWidth 0"/> <v:f eqn="sum @0 1 0"/> <v:f eqn="sum 0 0 @1"/> <v:f eqn="prod @2 1 2"/> <v:f eqn="prod @3 21600 pixelWidth"/> <v:f eqn="prod @3 21600 pixelHeight"/> <v:f eqn="sum @0 0 1"/> <v:f eqn="prod @6 1 2"/> <v:f eqn="prod @7 21600 pixelWidth"/> <v:f eqn="sum @8 21600 0"/> <v:f eqn="prod @7 21600 pixelHeight"/> <v:f eqn="sum @10 21600 0"/> </v:formulas> <v:path o:extrusionok="f" gradientshapeok="t" o:connecttype="rect"/> <o:lock v:ext="edit" aspectratio="t"/> </v:shapetype><v:shape id="_x0000_i1027" type="#_x0000_t75" style='width:94.5pt;
height:27.75pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image001.png"
o:title="" chromakey="white"/> </v:shape><![endif]><![if !vml]><img width=126 height=37
src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image002.gif"
v:shapes="_x0000_i1027"><![endif]><span style='font-size:9.0pt;font-family:
Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-spacerun:yes'> </span><span style='mso-element:field-separator'></span></span><![endif]--><!--[if gte vml 1]><v:shape
id="_x0000_i1025" type="#_x0000_t75" style='width:94.5pt;height:27.75pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image001.png"
o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><!--[endif]--><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-end'></span></span><![endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;">Sales / Contribution<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>Merged plant Fixed cost = 80 + 50 = 130 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>Merged plant variable cost = 621 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>Merged plant sales = 840 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>Contribution = Fixed cost + Profit<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>Profit = Sales – Total cost<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 2;"> </span>=<span style="mso-spacerun: yes;"> </span>840 – (130 + 621) <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 2;"> </span>= 840 – 751 = 89 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span></span><!--[if supportFields]><span style='font-size:
9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>QUOTE </span><![if gte vml 1]><v:shape id="_x0000_i1028"
type="#_x0000_t75" style='width:10.5pt;height:11.25pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image003.png"
o:title="" chromakey="white"/> </v:shape><![endif]><![if !vml]><img width=14 height=15
src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image004.gif"
v:shapes="_x0000_i1028"><![endif]><span style='font-size:9.0pt;font-family:
Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-spacerun:yes'> </span><span style='mso-element:field-separator'></span></span><![endif]--><!--[if gte vml 1]><v:shape
id="_x0000_i1029" type="#_x0000_t75" style='width:10.5pt;height:11.25pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image003.png"
o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><img height="15" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image004.gif" v:shapes="_x0000_i1029" width="14" /><!--[endif]--><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-end'></span></span><![endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>Contribution = 130 + 89 = 219 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span></span><!--[if supportFields]><span style='font-size:
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o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><img height="15" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image006.gif" v:shapes="_x0000_i1031" width="27" /><!--[endif]--><!--[if supportFields]><span
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style='mso-spacerun:yes'> </span><span style='mso-element:field-separator'></span></span><![endif]--><!--[if gte vml 1]><v:shape
id="_x0000_i1033" type="#_x0000_t75" style='width:41.25pt;height:24pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image007.png"
o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><img height="32" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_i1033" width="55" /><!--[endif]--><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-end'></span></span><![endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;">840 = 498.63 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>(ii) At 90 % capacity utilization sales value of company No.1<span style="mso-spacerun: yes;"> </span>= 540 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>At 100% capacity utilization of company No. 1 sales value =</span><span style="font-family: Arial; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"> </span><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>QUOTE </span><![if gte vml 1]><v:shape id="_x0000_i1034"
type="#_x0000_t75" style='width:37.5pt;height:24.75pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image009.png"
o:title="" chromakey="white"/> </v:shape><![endif]><![if !vml]><img width=50 height=33
src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image010.gif"
v:shapes="_x0000_i1034"><![endif]><span style='font-size:9.0pt;font-family:
Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-spacerun:yes'> </span><span style='mso-element:field-separator'></span></span><![endif]--><!--[if gte vml 1]><v:shape
id="_x0000_i1035" type="#_x0000_t75" style='width:37.5pt;height:24.75pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image009.png"
o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><img height="33" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image010.gif" v:shapes="_x0000_i1035" width="50" /><!--[endif]--><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-end'></span></span><![endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;">100 = 600 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;"> </span>At 60% capacity <span style="mso-tab-count: 1;"> </span>utilization sales value of company No. 2 = 300<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;">At 100% capacity utilization of company No. 2 sales value = </span><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>QUOTE </span><![if gte vml 1]><v:shape id="_x0000_i1036"
type="#_x0000_t75" style='width:37.5pt;height:24pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image011.png"
o:title="" chromakey="white"/> </v:shape><![endif]><![if !vml]><img width=50 height=32
src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image012.gif"
v:shapes="_x0000_i1036"><![endif]><span style='font-size:9.0pt;font-family:
Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-spacerun:yes'> </span><span style='mso-element:field-separator'></span></span><![endif]--><!--[if gte vml 1]><v:shape
id="_x0000_i1037" type="#_x0000_t75" style='width:37.5pt;height:24pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image011.png"
o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><img height="32" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image012.gif" v:shapes="_x0000_i1037" width="50" /><!--[endif]--><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-end'></span></span><![endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;">100 = 500<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-spacerun: yes;"> </span></span><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>QUOTE </span><![if gte vml 1]><v:shape id="_x0000_i1038"
type="#_x0000_t75" style='width:10.5pt;height:11.25pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image003.png"
o:title="" chromakey="white"/> </v:shape><![endif]><![if !vml]><img width=14 height=15
src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image004.gif"
v:shapes="_x0000_i1038"><![endif]><span style='font-size:9.0pt;font-family:
Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-spacerun:yes'> </span><span style='mso-element:field-separator'></span></span><![endif]--><!--[if gte vml 1]><v:shape
id="_x0000_i1039" type="#_x0000_t75" style='width:10.5pt;height:11.25pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image003.png"
o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><img height="15" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image004.gif" v:shapes="_x0000_i1039" width="14" /><!--[endif]--><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-end'></span></span><![endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-spacerun: yes;"> </span>Merged plant capacity utilization = </span><!--[if supportFields]><span style='font-size:9.0pt;
font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>QUOTE </span><![if gte vml 1]><v:shape id="_x0000_i1040"
type="#_x0000_t75" style='width:69pt;height:24pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image013.png"
o:title="" chromakey="white"/> </v:shape><![endif]><![if !vml]><img width=92 height=32
src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image014.gif"
v:shapes="_x0000_i1040"><![endif]><span style='font-size:9.0pt;font-family:
Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-spacerun:yes'> </span><span style='mso-element:field-separator'></span></span><![endif]--><!--[if gte vml 1]><v:shape
id="_x0000_i1041" type="#_x0000_t75" style='width:69pt;height:24pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image013.png"
o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><img height="32" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image014.gif" v:shapes="_x0000_i1041" width="92" /><!--[endif]--><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-end'></span></span><![endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;">= 73.33%<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;">At 80% capacity utilization = </span><!--[if supportFields]><span style='font-size:
9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>QUOTE </span><![if gte vml 1]><v:shape id="_x0000_i1042"
type="#_x0000_t75" style='width:48.75pt;height:27pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image015.png"
o:title="" chromakey="white"/> </v:shape><![endif]><![if !vml]><img width=65 height=36
src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image016.gif"
v:shapes="_x0000_i1042"><![endif]><span style='font-size:9.0pt;font-family:
Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-spacerun:yes'> </span><span style='mso-element:field-separator'></span></span><![endif]--><!--[if gte vml 1]><v:shape
id="_x0000_i1043" type="#_x0000_t75" style='width:48.75pt;height:27pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image015.png"
o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><img height="36" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image016.gif" v:shapes="_x0000_i1043" width="65" /><!--[endif]--><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-end'></span></span><![endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-spacerun: yes;"> </span>= 916.41lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-spacerun: yes;"> </span></span><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US'><span
style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>QUOTE </span><![if gte vml 1]><v:shape id="_x0000_i1044"
type="#_x0000_t75" style='width:10.5pt;height:11.25pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image003.png"
o:title="" chromakey="white"/> </v:shape><![endif]><![if !vml]><img width=14 height=15
src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image004.gif"
v:shapes="_x0000_i1044"><![endif]><span style='font-size:9.0pt;font-family:
Arial;mso-ansi-language:EN-US'><span style='mso-spacerun:yes'> </span><span
style='mso-element:field-separator'></span></span><![endif]--><!--[if gte vml 1]><v:shape
id="_x0000_i1045" type="#_x0000_t75" style='width:10.5pt;height:11.25pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image003.png"
o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><img height="15" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image004.gif" v:shapes="_x0000_i1045" width="14" /><!--[endif]--><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US'><span
style='mso-element:field-end'></span></span><![endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-spacerun: yes;"> </span>Profit = Sales value – (FC +VC)<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-tab-count: 1;"> </span>= 916.41 – 751<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-tab-count: 1;"> </span>= 165.41 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">(iii) Profit = 75 lakhs <o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Total cost = 751 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Sales value = Profit + Total cost<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-tab-count: 1;"> </span>= 75 + 751 = 826 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">(iv) Profit = 75 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Increase in fixed price is 5% = 130 + </span><!--[if supportFields]><span style='font-size:9.0pt;font-family:Arial;
mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span style='mso-element:
field-begin'></span><span style='mso-spacerun:yes'> </span>QUOTE </span><![if gte vml 1]><v:shape
id="_x0000_i1046" type="#_x0000_t75" style='width:41.25pt;height:27pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image017.png"
o:title="" chromakey="white"/> </v:shape><![endif]><![if !vml]><img width=55 height=36
src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image018.gif"
v:shapes="_x0000_i1046"><![endif]><span style='font-size:9.0pt;font-family:
Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-spacerun:yes'> </span><span style='mso-element:field-separator'></span></span><![endif]--><!--[if gte vml 1]><v:shape
id="_x0000_i1047" type="#_x0000_t75" style='width:41.25pt;height:27pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image017.png"
o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><!--[endif]--><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-end'></span></span><![endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-spacerun: yes;"> 130*5/100</span>= 136.5 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;">Total cost = FC + VC = 621 + 136.5 = 757.5 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;">Sales = 75 + 757.5 = 832.5<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;">Increase in sales = 832.5 – 826 = 6.5 lakhs<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;">Percentage increase in selling price =</span><span style="font-family: Arial; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"> 6.5*100/826</span><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>QUOTE </span><![if gte vml 1]><v:shape id="_x0000_i1048"
type="#_x0000_t75" style='width:51.75pt;height:24pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image019.png"
o:title="" chromakey="white"/> </v:shape><![endif]><![if !vml]><img width=69 height=32
src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image020.gif"
v:shapes="_x0000_i1048"><![endif]><span style='font-size:9.0pt;font-family:
Arial;mso-ansi-language:EN-US;mso-bidi-font-style:italic'><span
style='mso-spacerun:yes'> </span><span style='mso-element:field-separator'></span></span><![endif]--><!--[if gte vml 1]><v:shape
id="_x0000_i1026" type="#_x0000_t75" style='width:51.75pt;height:24pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image019.png"
o:title="" chromakey="white"/> </v:shape><![endif]--><!--[if !vml]--><!--[endif]--><!--[if supportFields]><span
style='font-size:9.0pt;font-family:Arial;mso-ansi-language:EN-US;mso-bidi-font-style:
italic'><span style='mso-element:field-end'></span></span><![endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-bidi-font-style: italic;"><span style="mso-spacerun: yes;"> </span>= 0.78%<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com1tag:blogger.com,1999:blog-6717078704597438349.post-37821275699633748202011-06-20T02:23:00.000-07:002011-06-20T02:23:24.738-07:00Taking into account the following additional information, your are required to prepare funds flow statement and statement change in working capital.<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Following are the balance sheets of a limited company as on 31<sup>st</sup> December, 2009 and 2010.<o:p></o:p></span></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-bottom-style: none; border-collapse: collapse; border-color: initial; border-left-style: none; border-right-style: none; border-top-style: none; border-width: initial; width: 468px;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid black 1.0pt; mso-border-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 106.95pt;" valign="top" width="143"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Liabilities<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2009<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Rs.<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 46.25pt;" valign="top" width="62"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2010<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Rs.<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Assets<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.65pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2009<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Rs.<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2010<o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Rs.<o:p></o:p></span></div></td> </tr>
<tr style="height: 97.0pt; mso-yfti-irow: 1;"> <td style="border-top: none; border: solid black 1.0pt; height: 97.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 106.95pt;" valign="top" width="143"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Share capital<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Reserves<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">P & L account<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Bank loan (Long-term)<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Creditors<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Bills payable<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 97.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">54,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">13,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8,600<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">25,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">28,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 97.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 46.25pt;" valign="top" width="62"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">74,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">15,500<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8,800<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">--<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">24,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8,500<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 97.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Goodwill<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Buildings<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Plant<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Stock<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Debtors<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Cash<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Bank<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 97.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.65pt;" valign="top" width="66"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">3,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">50,950<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">35,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">25,500<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">22,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">150<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">--<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 97.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,520<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">48,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">43,000<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">18,800<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">16,200<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">180<o:p></o:p></span></div><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2,100<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 2; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 106.95pt;" valign="top" width="143"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Total <o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1,36,600<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 46.25pt;" valign="top" width="62"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1,30,800<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.65pt;" valign="top" width="66"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1,36,600<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.85pt;" valign="top" width="61"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">1,30,800<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .25in; margin-right: 0in; margin-top: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Taking into account the following additional information, your are required to prepare funds flow statement and statement change in working capital.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(a)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Dividend paid was Rs. 6,000.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(b)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Rs. 3,600 was written off as depreciation on plant and Rs. 2,950 on buildings.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">(c)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Profit on sale of plant was Rs. 3,000.<o:p></o:p></span></div><div class="ListParagraph" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Ans:<span style="mso-tab-count: 1;"> </span><b><u>Working Notes<o:p></o:p></u></b></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><b><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-spacerun: yes;"> </span>Profit and loss adjustment account<o:p></o:p></span></u></b></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; mso-border-alt: solid black .5pt; mso-border-insideh: .5pt solid black; mso-border-insidev: .5pt solid black; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 160;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid black 1.0pt; mso-border-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">To transfer to general reserve<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-spacerun: yes;"> </span>(15500 – 13000)<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2500<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">By bal b/d<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8600<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">To Dividend<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">6000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">By profit on sale of plant<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">3000<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">To goodwill write-off<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-spacerun: yes;"> </span>(3000 -2520)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">480<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">By funds from operation<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">12730<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">To Depreciation on plant<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">3600<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><br />
</div></td> </tr>
<tr style="height: 9.5pt; mso-yfti-irow: 4;"> <td style="border-top: none; border: solid black 1.0pt; height: 9.5pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">To<span style="mso-spacerun: yes;"> </span>depreciation on buildings<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 9.5pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2<b>9</b>50<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 9.5pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 9.5pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><br />
</div></td> </tr>
<tr style="height: 5.45pt; mso-yfti-irow: 5;"> <td style="border-top: none; border: solid black 1.0pt; height: 5.45pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">To Bal C/d<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.45pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8800<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.45pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 5.45pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 6; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Total<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">24330<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">24330<o:p></o:p></span></div></td> </tr>
</tbody></table><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><b><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Plant account<o:p></o:p></span></u></b></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; mso-border-alt: solid black .5pt; mso-border-insideh: .5pt solid black; mso-border-insidev: .5pt solid black; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 160;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid black 1.0pt; mso-border-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">To bal b/d<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">35000<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">By depreciation<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">3600<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">To profit on sale<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">3000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">By bank (sales)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">--<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">To bank (purchase)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8600<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">By bal c/d<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">43000<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 3; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Total<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">46600<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">46600<o:p></o:p></span></div></td> </tr>
</tbody></table><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><b><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Building account<o:p></o:p></span></u></b></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; mso-border-alt: solid black .5pt; mso-border-insideh: .5pt solid black; mso-border-insidev: .5pt solid black; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 160;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid black 1.0pt; mso-border-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">To bal b/d<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">50950<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">By depreciation<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2950<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">By bal c/d<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">49000<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 2; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 140.1pt;" valign="top" width="187"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Total<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.55pt;" valign="top" width="57"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">50950<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.95pt;" valign="top" width="155"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.35pt;" valign="top" width="59"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">50950<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: center;"><b><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Funds flow statement for the year 31<sup>st</sup> Dec 2010<o:p></o:p></span></u></b></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; mso-border-alt: solid black .5pt; mso-border-insideh: .5pt solid black; mso-border-insidev: .5pt solid black; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 160;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td colspan="2" style="border: solid black 1.0pt; mso-border-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.05pt;" valign="top" width="232"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Sources<o:p></o:p></span></div></td> <td colspan="2" style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 167.3pt;" valign="top" width="223"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Application<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 97.55pt;" valign="top" width="130"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Issue of shares<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-spacerun: yes;"> </span>(74000 – 54000)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 76.5pt;" valign="top" width="102"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">20,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.65pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Plant purchase<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.65pt;" valign="top" width="112"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8600<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 97.55pt;" valign="top" width="130"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Funds from operation<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 76.5pt;" valign="top" width="102"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">12,730<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.65pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Dividend<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.65pt;" valign="top" width="112"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">6000<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 97.55pt;" valign="top" width="130"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 76.5pt;" valign="top" width="102"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.65pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;"><span style="mso-spacerun: yes;"> </span>Long term loan repaid<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.65pt;" valign="top" width="112"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">25000<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 97.55pt;" valign="top" width="130"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Decrease in working capital <o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 76.5pt;" valign="top" width="102"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">6870<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.65pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.65pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 5; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 97.55pt;" valign="top" width="130"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Total<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 76.5pt;" valign="top" width="102"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">39,600<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.65pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.65pt;" valign="top" width="112"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">39,600<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: center;"><b><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Statements showing changes in working capital for the year 2010<o:p></o:p></span></u></b></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-bottom-style: none; border-collapse: collapse; border-color: initial; border-left-style: none; border-right-style: none; border-top-style: none; border-width: initial; width: 405px;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid black 1.0pt; mso-border-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.75pt;" valign="top" width="112"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: center;"><br />
</div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2009<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2010<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Increase<o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: center;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Decrease<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.75pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Current assets<o:p></o:p></span></u></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.75pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Debts<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">22000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">16200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">--<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">6700<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.75pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Stock<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">25500<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">18800<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">--<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">5800<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.75pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Cash<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">150<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">180<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">30<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">--<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 5;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.75pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Bank<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">--<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2100<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">2100<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">--<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 6;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.75pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><u><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Current liabilities<o:p></o:p></span></u></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 7;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.75pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Creditors<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">28000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">24000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">4000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 8;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.75pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Bills payable<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">8500<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">500<o:p></o:p></span></div></td> </tr>
<tr style="mso-yfti-irow: 9; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 83.75pt;" valign="top" width="112"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Total<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 49.6pt;" valign="top" width="66"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">6130<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 56.7pt;" valign="top" width="76"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none; text-align: right;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">13000<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-pagination: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-indent: .5in;"><span style="font-family: Arial; font-size: 9.0pt; mso-ansi-language: EN-US;">Decrease in working capital = 6870<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-38233978557435011462011-06-20T02:21:00.001-07:002011-06-20T02:21:17.749-07:00What is dividend and why is dividend decision important?<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="text-align: justify;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">What is dividend and why is dividend decision important? <o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Definition:<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify; text-indent: .5in;"><span style="font-size: 11.0pt;">Distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. The dividend is most often quoted in terms of the dollar amount each share receives (dividends per share). It can also be quoted in terms of a percent of the current market price, referred to as dividend yield.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-indent: .5in;"><span style="font-size: 11.0pt;">A <a href="http://www.investorwords.com/7730/taxable.html"><span style="color: black; text-decoration: none; text-underline: none;">taxable</span></a> <a href="http://www.investorwords.com/3634/payment.html"><span style="color: black; text-decoration: none; text-underline: none;">payment</span></a> declared by a <a href="http://www.businessdictionary.com/definition/company.html"><span style="color: black; text-decoration: none; text-underline: none;">company</span></a>'s <a href="http://www.investorwords.com/511/Board_of_Directors.html"><span style="color: black; text-decoration: none; text-underline: none;">board of directors</span></a> and given to its <a href="http://www.investorwords.com/4527/shareholder.html"><span style="color: black; text-decoration: none; text-underline: none;">shareholders</span></a> out of the company's <a href="http://www.businessdictionary.com/definition/current.html"><span style="color: black; text-decoration: none; text-underline: none;">current</span></a> or <a href="http://www.investorwords.com/4235/retained_earnings.html"><span style="color: black; text-decoration: none; text-underline: none;">retained earnings</span></a>, usually <a href="http://www.investorwords.com/4003/quarterly.html"><span style="color: black; text-decoration: none; text-underline: none;">quarterly</span></a>. Dividends are usually given as <a href="http://www.investorwords.com/747/cash.html"><span style="color: black; text-decoration: none; text-underline: none;">cash</span></a> (<a href="http://www.investorwords.com/763/cash_dividend.html"><span style="color: black; text-decoration: none; text-underline: none;">cash dividend</span></a>), but they can also <a href="http://www.investorwords.com/7230/take.html"><span style="color: black; text-decoration: none; text-underline: none;">take</span></a> the <a href="http://www.businessdictionary.com/definition/form.html"><span style="color: black; text-decoration: none; text-underline: none;">form</span></a> of <a href="http://www.investorwords.com/4725/stock.html"><span style="color: black; text-decoration: none; text-underline: none;">stock</span></a> (<a href="http://www.investorwords.com/4732/stock_dividend.html"><span style="color: black; text-decoration: none; text-underline: none;">stock dividend</span></a>) or other <a href="http://www.investorwords.com/3900/property.html"><span style="color: black; text-decoration: none; text-underline: none;">property</span></a>. Dividends provide an <a href="http://www.investorwords.com/2394/incentive.html"><span style="color: black; text-decoration: none; text-underline: none;">incentive</span></a> to <a href="http://www.investorwords.com/3563/own.html"><span style="color: black; text-decoration: none; text-underline: none;">own</span></a> stock in <a href="http://www.investorwords.com/4675/stable.html"><span style="color: black; text-decoration: none; text-underline: none;">stable</span></a> companies even if they are not experiencing much <a href="http://www.investorwords.com/2258/growth.html"><span style="color: black; text-decoration: none; text-underline: none;">growth</span></a>. Companies are not <a href="http://www.businessdictionary.com/definition/required.html"><span style="color: black; text-decoration: none; text-underline: none;">required</span></a> to <a href="http://www.investorwords.com/3626/pay.html"><span style="color: black; text-decoration: none; text-underline: none;">pay</span></a> dividends. The companies that <a href="http://www.investorwords.com/3389/offer.html"><span style="color: black; text-decoration: none; text-underline: none;">offer</span></a> dividends are most often companies that have progressed beyond the growth <a href="http://www.businessdictionary.com/definition/phase.html"><span style="color: black; text-decoration: none; text-underline: none;">phase</span></a>, and no longer <a href="http://www.investorwords.com/461/benefit.html"><span style="color: black; text-decoration: none; text-underline: none;">benefit</span></a> sufficiently by reinvesting their <a href="http://www.investorwords.com/3880/profit.html"><span style="color: black; text-decoration: none; text-underline: none;">profits</span></a>, so they usually choose to pay them out to their shareholders also called <a href="http://www.investorwords.com/3640/payout.html"><span style="color: windowtext; text-decoration: none; text-underline: none;">payout</span></a><o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Dividend Decision<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify; text-indent: .5in;"><span style="font-size: 11.0pt;">A <a href="http://www.investorwords.com/7730/taxable.html"><span style="color: black; text-decoration: none; text-underline: none;"><span style="mso-spacerun: yes;"> </span></span><span style="color: windowtext; text-decoration: none; text-underline: none;">Dividend decisions are an important aspect of corporate financial policy since they can have an effect on the availability as well as the cost of capital. The Lintner proposition which asserts that the corporate management maintains a constant target payout ratio has<span style="mso-spacerun: yes;"> </span>been the most influential. However, the concept of primary of dividend decisions as well as the reasons for it are not unambiguously defined. There is a variety of theories which attempt to rationalize the observed secular constancy of the dividend payout ratio. These studies examine the factors underlying the structure of the management, the nature of the product and financial markets, as well as the influence of the shareholders in their attempt to explain the Lintner proposition. However, in the case of any one firm, the following two pertinent questions need to be examined on an empirical basis to provide substance to the notion of primary of dividend decisions. (a) What are dividend decisions primary for?, and (b) for whom are they primary? An attempt has been made to develop a theoretical framework to approach these questions and identify the appropriate concept of primary and determine empirically the relationship of the primary notion with the objectives of the share holders and the management. The modeling framework postulates that (a) the dividend decisions may be primary to the management of the firm and /or the shareholder, and (b) each of the decision makers can have a short run and /or long run objective when they evaluate dividend decisions. Share price increases have been postulated as the basic short run objective of both the groups of decision makers. Similarly, both the share holders and the management are viewed as net worth maximizes over the long run. The fundamental hypothesis for the short run models is that the management increases the dividend per share whenever the share price down, and that the share holder responds, to these in such a way as to increase the share price. This result is expected if dividend decisions are primary for both the groups. In the long run context, it was felt that a progressive management would increase the net worth the firm by investments in fixed assets or through building the reserve base.<o:p></o:p></span></a></span></div><div class="MsoNormal" style="text-align: justify;"><span style="font-size: 11.0pt;"><a href="http://www.investorwords.com/7730/taxable.html"><span style="color: windowtext; text-decoration: none; text-underline: none;"><span style="mso-tab-count: 1;"> </span>Dividends would be a primary decision if the internal financing of investment is constrained by the necessity to pay dividends at a constant rate. These are two extreme forms in which dividend decisions can be considered to be primary. A variety of intermediate positions are possible in any specific case of a firm. The models were designed to accommodate a rich variety of such behavioral patterns. <o:p></o:p></span></a></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-size: 11.0pt; mso-bidi-font-weight: bold;"><span style="mso-tab-count: 1;"> </span>Dividend decision</span><span style="font-size: 11.0pt;"> determines the division of earnings between payments to shareholders and retained earnings.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span><span style="mso-bidi-font-weight: bold;">The Dividend Decision</span>, in Corporate finance, is a decision made by the directors of a company about the amount and timing of any cash payments made to the company's stockholders. <span style="mso-bidi-font-weight: bold;">The Dividend Decision</span> is an important part of the present day corporate world. The <span style="mso-bidi-font-weight: bold;">Dividend decision</span> is an important one for the firm as it may influence its capital structure and stock price. In addition, the <span style="mso-bidi-font-weight: bold;">Dividend decision</span> may determine the amount of taxation that stockholders pay. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><b><u><span style="font-size: 11.0pt;">Factors influencing Dividend Decisions:<o:p></o:p></span></u></b></div><div class="MsoNormal" style="text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>There are certain issues that are taken into account by the directors while making the <span style="mso-bidi-font-weight: bold;">dividend decisions:</span> <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l1 level1 lfo1; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Free Cash Flow <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l1 level1 lfo1; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Signaling of Information <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l1 level1 lfo1; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Clients of Dividends <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-size: 11.0pt;">Free Cash Flow Theory:<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The free cash flow theory is one of the prime factors of consideration when a <span style="mso-bidi-font-weight: bold;">dividend decision</span> is taken. As per this theory the companies provide the shareholders with the money that is left after investing in all the projects that have a positive net present value.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
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</div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-size: 11.0pt;">Signaling of Information: <o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>It has been observed that the increase of the worth of stocks in the share market is directly proportional to the dividend information that is available in the market about the company. Whenever a company announces that it would provide more dividends to its shareholders, the price of the shares increases.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-size: 11.0pt;">Clients of Dividends:<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span></span></b><span style="font-size: 11.0pt;">While taking <span style="mso-bidi-font-weight: bold;">dividend decisions</span> the directors have to be aware of the needs of the various types of shareholders as a particular type of distribution of shares may not be suitable for a certain group of shareholders. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>It has been seen that the companies have been making decent profits and also reduced their expenditure by providing dividends to only a particular group of shareholders. <span style="mso-bidi-font-weight: bold;">For more information please refer to the following links:<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><b><span style="font-size: 11.0pt;">Forms of Dividend</span></b><span style="font-size: 11.0pt; mso-bidi-font-weight: bold;"> </span><span style="font-size: 11.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l2 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt; mso-bidi-font-weight: bold;">Scrip Dividend</span><span style="font-size: 11.0pt;">- An unusual type of dividend involving the distribution of promissory notes that calls for some type of payment at a future date. <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l2 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt; mso-bidi-font-weight: bold;">Bond Dividend</span><span style="font-size: 11.0pt;">- A type of liability dividend paid in the dividend payer's bonds. <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l2 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt; mso-bidi-font-weight: bold;">Property Dividend</span><span style="font-size: 11.0pt;">- A stockholder dividend paid in a form other than cash, scrip, or the firm's own stock. <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l2 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt; mso-bidi-font-weight: bold;">Cash Dividend</span><span style="font-size: 11.0pt;">- A dividend paid in cash to a company's shareholders , normally out of the its current earnings or accumulated profits <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l2 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt; mso-bidi-font-weight: bold;">Debenture Dividend</span><span style="font-size: 11.0pt;"> <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l2 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt; mso-bidi-font-weight: bold;">Optional Dividend</span><span style="font-size: 11.0pt;">- Dividend which the shareholder can choose to take as either cash or stock. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="font-size: 11.0pt;"><br />
<b>Significance of dividend decision</b><b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">The firm has to balance between the growth of the company and the distribution to the shareholders <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It has a critical influence on the value of the firm <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It has to also to strike a balance between the long term financing decision( company distributing dividend in the absence of any investment opportunity) and the wealth maximization <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">The market price gets affected if dividends paid are less. <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Retained earnings helps the firm to concentrate on the growth, expansion and modernization of the firm <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">To sum up, it to a large extent affects the financial structure, flow of funds, corporate liquidity, stock prices, and growth of the company and investor's satisfaction. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="font-size: 11.0pt;"><br />
<b>Factors influencing the dividend decision</b><b style="mso-bidi-font-weight: normal;"> <o:p></o:p></b></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Liquidity of funds <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Stability of earnings <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Financing policy of the firm <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Dividend policy of competitive firms <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Past dividend rates <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Debt obligation <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Ability to borrow <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Growth needs of the company <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Profit rates <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Legal requirements <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Policy of control <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Corporate taxation policy <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Tax position of shareholders <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Effect of trade policy <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Attitude of the investor group <o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-50234808603582510302011-06-20T02:16:00.001-07:002011-06-20T02:16:38.246-07:00Discuss the concept of working capital what shall be the repercussions if the firm has a. Shortage of working capital b. Excess of working capital<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="text-align: justify;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Discuss the concept of working capital what shall be the repercussions if the firm has<o:p></o:p></span></b></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">a.<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Shortage of working capital<o:p></o:p></span></b></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l3 level1 lfo1; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">b.<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Excess of working capital <o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;">Meaning and Concept of Working Capital and its management<o:p></o:p></span></strong></div><div class="MsoNormal" style="text-align: justify;"><span style="color: #282828; font-size: 11.0pt;"><br />
<span style="mso-tab-count: 1;"> </span>Working capital is that part of company’s capital which is used for purchasing raw material and involve in sundry debtors. We all know that current assets are very important for proper working of fixed assets. Suppose, if you have invested your money to purchase machines of company and if you have not any more money to buy raw material, then your machinery will no use for any production without raw material. From this example, you can understand that working capital is very useful for operating any business organization. We can also take one more liquid item of current assets that is cash. If you have not cash in hand, then you can not pay for different expenses of company, and at that time, your many business works may delay for not paying certain expenses. If we define working capital in very simple form, then we can say that working capital is the excess of current assets over current liabilities. <br />
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<strong>Types of Working Capital:<span style="mso-spacerun: yes;"> </span><o:p></o:p></strong></span></div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;">1. Gross working capital:<o:p></o:p></span></strong></div><div class="MsoNormal" style="text-align: justify;"><span style="color: #282828; font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Total or gross working capital is that working capital which is used for all the current assets. Total value of current assets will equal to gross working capital.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: #282828; font-size: 11.0pt;"><br />
<strong>2. Net Working Capital: </strong><strong><span style="font-weight: normal;"><o:p></o:p></span></strong></span></div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span></span></strong><span style="color: #282828; font-size: 11.0pt;">Net working capital is the excess of current assets over current liabilities.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: #282828; font-size: 11.0pt;"><br />
<strong>Net Working Capital = Total Current Assets – Total Current Liabilities</strong> <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: #282828; font-size: 11.0pt;"><br />
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This amount shows that if we deduct total current liabilities from total current assets, then balance amount can be used for repayment of long term </span><span style="font-size: 11.0pt;"><a href="http://www.svtuition.org/2009/08/meaning-and-explanation-of-debt.html"><span style="color: windowtext; text-decoration: none; text-underline: none;">debts</span></a> <span style="color: #282828;">at any time.<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: #282828; font-size: 11.0pt;"><br />
<strong>3. Permanent Working Capital: </strong><strong><span style="font-weight: normal;"><o:p></o:p></span></strong></span></div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span></span></strong><span style="color: #282828; font-size: 11.0pt;">Permanent working capital is that amount of capital which must be in cash or current assets for continuing the activities of business.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;">4. Temporary Working Capital<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></strong></div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span></span></strong><span style="color: #282828; font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Sometime, it may possible that we have to pay fixed liabilities, at that time we need working capital which is more than permanent working capital, then this excess amount will be temporary working capital. In normal working of business, we don’t need such capital.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;">In working capital management, we analyze following three points<o:p></o:p></span></strong></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;">What is the need for working capital?<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></strong></div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span></span></strong><span style="color: #282828; font-size: 11.0pt;">After study the nature of production, we can estimate the need for working capital. If company produces products at large scale and continues producing goods, then company needs high amount of working capital.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;">What is optimum level of Working capital in business?<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></strong></div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span></span></strong><span style="color: #282828; font-size: 11.0pt;">Have you achieved the optimum level of working capital which has invested in current assets? Because high amount of working capital will decrease the </span><span style="font-size: 11.0pt;"><a href="http://www.svtuition.org/2010/02/return-on-investment-roi.html"><span style="color: windowtext; text-decoration: none; text-underline: none;">return </span></a>on <a href="http://www.svtuition.org/2010/02/investment.html"><span style="color: windowtext; text-decoration: none; text-underline: none;">investment</span></a> a<span style="color: #282828;">nd low amount of working capital will increase the risk of business. So, it is very important decision to get optimum level of working capital where both profitability and risk will be balanced. For achieving optimum level of working capital, finance manager should also study the factors which affects the requirement of working capital and different elements of current assets. If he will manage cash, debtor and inventory, then working capital will automatically optimize.<o:p></o:p></span></span></div><div class="MsoNormal" style="text-align: justify;"><br />
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</div><div class="MsoNormal" style="text-align: justify;"><strong><span style="color: #282828; font-size: 11.0pt;">What are main Working capital policies of businesses?<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></strong></div><div class="MsoNormal" style="text-align: justify;"><span style="color: #282828; font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Policies are the guidelines which are helpful to direct business. Finance manager can also make working capital policies.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">INTRODUCTION</span></b><span style="font-size: 11.0pt;"><o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>For increasing shareholder's wealth a firm has to analyze the effect of fixed assets and current assets on its return and risk. Working Capital Management is related with the Management of current assets. The Management of current assets is different from fixed assets on the basis of the following points:<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">1. Current assets are for short period while fixed assets are for more than one Year.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">2. The large holdings of current assets, especially cash, strengthens Liquidity position but also reduces overall profitability, and to maintain an optimum level of liquidity and profitability, risk return trade off is involved holding Current assets.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">3. Only Current Assets can be adjusted with sales fluctuating in the short run. Thus, the firm has greater degree of flexibility in managing current Assets. The management of Current Assets helps affirm in building a good market reputation regarding its business and economic condition.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">Now first let us discuss the paradigms of Working Capital Management.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">CONCEPT OF WORKING CAPITAL:</span></b><span style="font-size: 11.0pt;"><o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The concept of Working Capital includes Current Assets and Current Liabilities both. There are two concepts of Working Capital they are Gross and Net Working Capital.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">1.</span></b><span style="font-size: 11.0pt;"> <b>Gross Working Capital</b>: Gross Working Capital refers to the firm's investment in Current Assets. Current Assets are the assets, which can be converted into cash within an accounting year or operating cycle. It includes cash, short-term securities, debtors (account receivables or book debts), bills receivables and stock (inventory).<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">2.</span></b><span style="font-size: 11.0pt;"> <b>Net Working Capital</b>: Net Working Capital refers to the difference between Current Assets and Current Liabilities are those claims of outsiders, which are expected to mature for payment within an accounting year. It includes creditors or accounts payables, bills payables and outstanding expenses. Net Working Copulate can be positive or negative. A positive Net Working Capital will arise when Courtney Assets exceed Current Liabilities and vice versa.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">Concept of Gross Working Capital<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The concept of Gross Working Capital focuses attention on two aspects of Current Assets' management. They are:<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>a) Way of optimizing investment in Current Assets.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>b) Way of financing current assets.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">a. Optimizing investment in Current Assets: <o:p></o:p></span></b></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Investment in Current Assets should be just adequate i.e., neither in excess nor deficit because excess investment increases liquidity but reduces profitability as idle investment earns nothing and inadequate amount of working capital can threaten the solvency of the firm because of its inability to meet its obligation. It is taken into consideration that the Working Capital needs of the firm may be fluctuating with changing business activities which may cause excess or shortage of Working Capital frequently and prompt management can control the imbalances.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">b. Way of financing Current Assets:<o:p></o:p></span></b></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span></span></b><span style="font-size: 11.0pt;">This aspect points to the need of arranging funds to finance Country Assets. It says whenever a need for working Capital arises; financing arrangement should be made quickly. The financial manager should have the knowledge of sources of the working Capital funds as wheel as investment avenues where idle funds can be temporarily invested.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">Concept of Net Working Capital:<o:p></o:p></span></b></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>This is a qualitative concept. It indicates the liquidity position of and suggests the extent to which working Capital needs may be financed by permanent sources of funds. Current Assets should be optimally more than Courtney Liabilities. It also covers the point of right combination of long term and short-term funds for financing court Assents. For every firm a particular amount of net Working Capital in permanent. Therefore it can be financed with long-term funds.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Thus both concepts, Gross and Net Working Capital, are equally important for the efficient management of Working Capital. There are no specific rules to determine a firm's Gross and Net Working Capital but it depends on the business activity of the firm.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">Working capital management is concerned with the problems that arise while managing the current assets the current liabilities and the interrelationship that exits between them. Thus, the WC management refers to all aspects of a administration of both current assets the current liabilities.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Every business concern should not have neither redundant nor cause excess WC nor into should be short of W.C. both condition are harmful and unprofitable for any business. But out of these two the shortage of WC is more dangerous for the well being of the firms.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">Impact/Harm of Redundant Or Excessive Working Capital</span></b><span style="font-size: 11.0pt;"><o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Excessive WC means idle funds, which earn no profits for the business, cannot earn proper rate of return on its investment.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">When there is a redundant WC, it may lead to unnecessary purchasing and accumulation of inventories causing more chances if theft, waste and losses.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Excessive WC implies excessive debtors and defective credit policy, which may cause higher incidences of bad debts.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It may result into overall inefficiency in the organizations.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">When there is excessive WC relation with banks and other financial institutions may not be maintained.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">The redundant WC gives rise to speculative transaction.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Due to low rate of return on investments the value of shares may also fall.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">In case of redundant WC there is always a chance of financing long terms assets from short terms funds, which is very harmful in long run for any organization.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Dangers of Short or Inadequate Working CapitalØ A concern, which had adequate WC, cannot pay its short-term liabilities in time. Thus it will lose its reputation and should be not be able to get good credit facilities.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l4 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It cannot by its requirements in bulk and cannot avail of discounts. It stagnates growth.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l4 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It becomes difficult for the firms to exploit favorable market conditions and undertake profitable projects due to non-availability of WC funds.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l4 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">The firm cannot pay day-to-day expenses of its operations and its credit inefficiencies, increases cost and reduces the profits of the business.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l4 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It becomes impossible to utilize efficiently the fixed assets due to non-availability of liquid funds thus the firms profitability would deteriorate.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l4 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">The rate of return on investments also falls with the shortage of WC.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l4 level1 lfo3; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Operating inefficiency creeps in and it becomes difficult to implement operating plans and achieve the firms profit targets.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">Need for Working Capital: <o:p></o:p></span></b></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span></span></b><span style="font-size: 11.0pt;">For earning profit and continue production activity, the firm has to invest enough funds in Current Assets in generating sales. Current Assets are needed because sometimes sales do not convert into cash instantaneously and it includes an operating cycle.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">Operating Cycle:</span></b><span style="font-size: 11.0pt;"> <o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Operating cycle is the time duration required to convert sales, after the conversion of resources into inventories, into cash. Investment in current assets such as inventories and debtors is realized during the firm's operating cycle, which is usually less than a year.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">The operating cycle of a manufacturing company involves three phases: -<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>1. Acquisition of resources such as raw material, labor, power and fuel etc.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 27.0pt; margin-right: 0in; margin-top: 0in; text-align: justify; text-indent: -27.0pt;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>2. Manufacture of the product which includes conversion into work-in-progress into finished goods.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>3. </span><st1:city><st1:place><span style="font-size: 11.0pt;">Sale</span></st1:place></st1:city><span style="font-size: 11.0pt;"> of the product either for cash or on credit.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>These phases affect cash flows because sometimes sale is done on credit and it takes sometimes to realize.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">Length or Duration of the Operating Cycle</span></b><span style="font-size: 11.0pt;">: <o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The length of the operating cycle of a manufacturing firm in the sum of the following:<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>1. Inventory Conversion period<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>2. Debtors Conversion periods.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The total of Debtors Conversion Period and Inventory Conversion Period is referred to as Gross Operating Cycle.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">1.</span></b><span style="font-size: 11.0pt;"> <b>Inventory Conversions Period:<o:p></o:p></b></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The Inventory Conversion Period is the total time needed for Producing and selling the product. It includes:<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>a. Raw Material Conversion Period.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>b. Work-in-progress Conversion Period.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>c. Finished Goods Conversion Period.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">2</span></b><span style="font-size: 11.0pt;">. <b>Debtors Conversion Period</b>:<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>It is the time required to collect the outstanding amount from the customers.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">Net Operating Cycle:</span></b><span style="font-size: 11.0pt;"> <o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Generally, a firm may resources (raw materials) on credit and temporarily postpones payment of certain expenses. Payables, which the firm can defer, are spontaneous sources of capital to finance investment in Courtney Assets.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The length of the time in which the firm is able to defer payments on various resource purchases is Payables Deferral period. The deference between Gross Operating Cycle and payables Deferral Period is called Net Operating Cycle. If depreciation is excluded from Net Operating Cycle, the computation repercussion represents Cash Conversion Cycle. It is net time interval between cash outflow.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Operating Cycle also represent the time interval over which additional funds, called Working Capital, should be obtained in order to carry out the firm's operations. The firm has to negotiate Working Capital from sources such as banks. The negotiated sources of Working Capital financing are called non-spontaneous sources. If net Operating Cycle of a firm increases it means further need for negotiated Working Capital.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">Calculation of Operating Cycle:</span></b><span style="font-size: 11.0pt;"> <o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The calculation of operating cycle helps to know the exact period of WC turnover i.e. how long it takes to convert cash again into cash? Through this calculation one can ascertain the WC period.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">FORMULA: -Raw Material Holding Period = Avg. Stocks of Raw Material/<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 225.0pt; margin-right: 0in; margin-top: 0in; text-align: justify; text-indent: -225.0pt;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>Avg. cost of consumption per day<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">Work in progress Conversion Period = Avg. work in progress/<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 189.0pt; margin-right: 0in; margin-top: 0in; text-align: justify; text-indent: -189.0pt;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>Avg. cost of Production per day<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">Finished goods holding period = Avg. stock of finished goods/<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>Avg. cost of goods sold per day<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">Receivables & Debtors collections Period = Avg. book debts/<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>Avg. credit sales per day<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">Credit period allowed by creditors = Avg. creditors/<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>Avg. credit purchase<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">DURATION OF OPERATING CYCLE</span></b><span style="font-size: 11.0pt;"><o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">GOC = RM + WIP + FG + D + R<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><st1:stockticker><span style="font-size: 11.0pt;">NOC</span></st1:stockticker><span style="font-size: 11.0pt;"> = GOC-C<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">Where </span><st1:stockticker><span style="font-size: 11.0pt;">GOV</span></st1:stockticker><span style="font-size: 11.0pt;"> = Gross operating cycle.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><st1:stockticker><span style="font-size: 11.0pt;">NOC</span></st1:stockticker><span style="font-size: 11.0pt;"> = Net operating cycle<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">RM = Raw material conversion period.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">C = Credit period available<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">WIP = WIP conversion period<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">FG = FG holding period<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">D & R = Detors and receivables collection period.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;">Note:<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l2 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">360 working days in a year are taken to calculate per day average. <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l2 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Avg. means opening + closing /2 <o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; mso-list: l2 level1 lfo4; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Depreciation is excluded while calculating cost of production & sales as it is a non-fund expense and does not require working capital. <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="font-size: 11.0pt;"><br />
<b>Permanent and Variable Working Capital:<o:p></o:p></b></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>There is always a minimum level of current Assets, which is continuously required by the firm to carry on its business operations. The minimum level of Current Assets is referred to as permanent of fixed Working Capital. It is permanent in the same way as the firm's fixed assets are. The extra Working Capital, needed to support the changing production and sales activities are called fluctuating or variable or temporary Working Capital.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Both Kinds of Working Capital, permanent and temporary, are necessary to facilitate production and sale through the operating Cycle.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">Estimating Working Capital Needs: </span></b><span style="font-size: 11.0pt;">Working Capital needs can be estimated by three different methods, which have been successfully applied in practice. They are follows:<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">1.</span></b><span style="font-size: 11.0pt;"> <b>Current Assets Holding Period: <o:p></o:p></b></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>To estimate Working Capital requirements on the basis of average holding period of Current Assets and relating them to costs based on the company's experience in the previous years. This method is based on the operating cycle concept.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">2.</span></b><span style="font-size: 11.0pt;"> <b>Ratio of Sales: <o:p></o:p></b></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span></span></b><span style="font-size: 11.0pt;">To estimate Working Capital requirements as a ratio of sales on assumption that Current Assets change with sales.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">3.</span></b><span style="font-size: 11.0pt;"> <b>Ratio of fixed Investment: <o:p></o:p></b></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span></span></b><span style="font-size: 11.0pt;">To estimate Working Capital requirements as a percentage of fixed investment. The most appropriate method of calculating the Working Capital needs of firm is the concept of operating cycle. There are some limitations with all the three approaches therefore some factors govern the choice of method of Working Capital.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Factors considered are seasonal variations in operations, accuracy sales forecasts, investment cost and variability in sales price would generally be considered. The production cycle and credit and collection policy of the firm would have an impact on Working Capital requirements.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">Current Assets Financing:<o:p></o:p></span></b></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>A firm can adopt different financing policies for Current Assets Three types of financing used can be:<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>1. Long-term financing such as shares, debentures etc.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>2. Short-term financing such as public deposits, commercial papers etc.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 27.0pt; margin-right: 0in; margin-top: 0in; text-align: justify; text-indent: -27.0pt;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>3. Spontaneous financing refers to the automatic sources of short-term funds arising in the normal course of a business such as trade credit (suppliers) and outstanding expenses etc.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The real choice of financing Current Assets is between the long term and short-term sources of finances. The three approaches based on the mix of long and short-term mix are:<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">1.</span></b><span style="font-size: 11.0pt;"> <b>Matching Approach:</b> <o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>When the firm follows matching approach (also known as hedging approach), long term financing will be used to finance Fixed Assets and permanent Current Assets and short-term financing to finance temporary or variable Current Assets. The justification for the exact matching is that, since the purpose of financing is to pay for assets, the source of financing and the assets should be relinquished simultaneously so that financing becomes less expensive and inconvenient. However, exact matching is not possible because of the uncertainty about the expected lives of assets.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">2.</span></b><span style="font-size: 11.0pt;"> <b>Conservative Approach:</b> <o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The financing policy of the firm is said to be a conservative when it depends more on long-term funds for financing needs. Under a conservative plan, the firm finances its permanent assets and also a part of temporary Current Assets with long term financing. In the periods when the firm has no need for temporary Current Assets, the idle long-term funds can be invested in the tradable securities to conserve liquidity. Thus, the firm has less risk of shortage of funds.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">3. Aggressive Approach:</span></b><span style="font-size: 11.0pt;"> <o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>An aggressive approach is said to be followed by the firm when it uses more short term financing than warranted by the matching approach. Under an aggressive approach, the firm finances a part of its permanent current assets with short term financing. Some firms even finance a part of their fixed assets with short term financing which makes the firm more risky.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">Managing Current Assets: <o:p></o:p></span></b></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span></span></b><span style="font-size: 11.0pt;">Management of Current Assets is done in three parts. They are:<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>1) Management of cash and cash equivalents.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>2) Management of inventory.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-spacerun: yes;"> </span>3) Management of accounts receivable and factoring.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>Thus, the basic goal of WC management is to manage the current assets the current liabilities of the firm in such a way that a satisfactory level of WC is maintained, i.e. it is neither inadequate nor excessive WC management policies of a firms have a great effect on its Profitability, Liquidity and Structural health of the organization.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>WC management is an integral part of overall corporate management. For proper WC management the financial manager has to perform the following basic functions:-<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l6 level1 lfo5; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Estimating the WC requirement.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l6 level1 lfo5; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Determining the optimum level of current assets.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l6 level1 lfo5; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Financing of WC needs.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l6 level1 lfo5; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Analysis and control of WC.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>WC management decision is three dimensional in nature i.e. these decisions are usually related to these there sphere or fields.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l5 level1 lfo6; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Profitability, risk and liquidity.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l5 level1 lfo6; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Composition and level of current assets.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l5 level1 lfo6; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Composition and level of current liabilities.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">PRINCIPLES OF WORKING CAPITAL:<o:p></o:p></span></b></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>There are four principle of working capital management. They are being depicted as below:<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">(i)</span></b><span style="font-size: 11.0pt;"> <b>Principle of Risk Variation</b>: - <o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The goal of WC management is to establish a suitable trade between profitability and risk. Risk here refers to a firm's ability to honor its obligation as and when they become due for payments. Larger investment in current assets will lead to dependence. Short term borrowings increases liquidity, reduces risk and thereby decreases the opportunity for gain or loss On the other hand the reserve situation will increase risk and profitability And reduce liquidity thus there is direct relationship between risk and profitability and inverse relationship between liquidity and risk.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">(ii)</span></b><span style="font-size: 11.0pt;"> <b>Principle of Cost Capital</b>: - <o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The various sources of raising WC finance have different cost of capital and the degree of risk involved. Generally higher the cost lower the risk, Lower the risk higher the cost. A sound WC management should always try to achieve the balance between these two.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">(iii)</span></b><span style="font-size: 11.0pt;"> <b>Principle of Equity Position</b>: - <o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>This principle is considered with planning the total investment in current assets. As per this principle the amount of WC investment in each component should be adequately justified by a firms equity position Every rupee contributed current assets should contribute to the net worth of the firm The level of current assets may be measured with the help of two ratios. They are:<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo7; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Current assets as a percentage of total assets.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo7; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">Current assets as a percentage of total sales.<o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><br />
</div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><b><span style="font-size: 11.0pt;">(iv)Principle of Maturity Payment</span></b><span style="font-size: 11.0pt;">: - <o:p></o:p></span></div><div style="margin-bottom: .0001pt; margin: 0in; text-align: justify;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>This principle is concerned with planning the source of finance for WC. As per this principle a firm should make every effort to relate maturities of its flow of internally generated funds in other words it should plan its cash inflow in such a way that it could easily cover its cash out flows or else it will fail to meet its obligation in time.<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com2tag:blogger.com,1999:blog-6717078704597438349.post-74582375832739110822011-06-20T02:12:00.000-07:002011-06-20T02:12:51.253-07:00Discount rate is 10%? P.V.F. at 10% for five year are 0.909, 0.826, 0,751, 0.683 and 0.621. Suggest which project should be accepted.<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">The following details relates to the two machines X and Y:<o:p></o:p></b></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: 41.4pt; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 480;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td colspan="3" style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 368.1pt;" valign="top" width="491"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Machine X<span style="mso-spacerun: yes;"> </span>Machine Y<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td rowspan="4" style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 224.1pt;" valign="top" width="299"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Cost <o:p></o:p></b></div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Estimated Life<o:p></o:p></b></div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Estimated salvage value<o:p></o:p></b></div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Working Capital required in the beginning <o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Rs.56,125<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Rs.56,125<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">5 years<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">5 years<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Rs.3,000<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Rs.3,000<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Rs.10,000<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Rs.20,000<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 5; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 224.1pt;" valign="top" width="299"> <div class="MsoNormal"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal"><br />
</div></td> </tr>
</tbody></table><div class="MsoNormal"><br />
</div><div class="MsoNormal" style="text-indent: .5in;"><b style="mso-bidi-font-weight: normal;">Annual income after tax and depreciation:<o:p></o:p></b></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: 41.4pt; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 480;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Year<o:p></o:p></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Rs.<o:p></o:p></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Rs.<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">I<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">3,275<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">11,375<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">II<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">5,375<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">9,375<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">III<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">7,375<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">7,375<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">IV<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">9,375<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">5,375<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 5; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">V<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">11,375<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">3,375<o:p></o:p></b></div></td> </tr>
</tbody></table><div class="MsoNormal" style="text-indent: .5in;"><br />
</div><div class="MsoNormal" style="margin-left: .5in; text-align: justify;"><b style="mso-bidi-font-weight: normal;">Overhauling charges at the end of third year Rs.25,000 on machine X. Depreciation has been charged at straight line method. Discount rate is 10%? P.V.F. at 10% for five year are 0.909, 0.826, 0,751, 0.683 and 0.621. Suggest which project should be accepted.<o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><b style="mso-bidi-font-weight: normal;">Ans.<o:p></o:p></b></div><div class="MsoNormal" style="margin-left: .75in; mso-list: l0 level1 lfo1; tab-stops: list .75in; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="mso-list: Ignore;">(A)<span style="font: 7.0pt "Times New Roman";"> </span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;">Calculation of Depreciation p.a<o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>Machine X:</div><div class="MsoNormal" style="text-align: justify;"><span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 4;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><u>56125 – 3000 <o:p></o:p></u></div><div class="MsoNormal" style="text-align: justify;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>SLM Dep. p.a<span style="mso-tab-count: 1;"> </span>=<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>5</div><div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>= 10625</div><div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span></div><div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>Machine Y:</div><div class="MsoNormal" style="text-align: justify;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><u>56125 – 3000 <o:p></o:p></u></div><div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>SLM Dep. p.a<span style="mso-spacerun: yes;"> </span>=<span style="mso-spacerun: yes;"> </span>5</div><div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>= 10625</div><div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-left: .75in; mso-list: l0 level1 lfo1; tab-stops: .5in list .75in left 157.5pt; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="mso-list: Ignore;">(B)<span style="font: 7.0pt "Times New Roman";"> </span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;">calculation of Net Operations<o:p></o:p></b></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-bottom-style: none; border-collapse: collapse; border-color: initial; border-left-style: none; border-right-style: none; border-top-style: none; border-width: initial; margin-left: 0.7in; width: 576px;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;"><br />
</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Particulars</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">1</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">2</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">3</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">4</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">5</div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Machine X:</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">1)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Annual Income after tax and depreciation</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">3275</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">5375</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">7375</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">9375</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">11375</div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">2)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Depreciation</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">10625</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">10625</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">10625</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">10625</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">10625</div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">3)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Cash Flow (1+2)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">14000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">16000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">18000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">20000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">22000</div></td> </tr>
<tr style="mso-yfti-irow: 5;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Machine Y:</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 6;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">4) </div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Annual Income after tax and depreciation</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">11375</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">9375</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">7375</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">5375</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">3275</div></td> </tr>
<tr style="mso-yfti-irow: 7;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">5)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Depreciation</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">10625</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">10625</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">10625</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">10625</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">10625</div></td> </tr>
<tr style="mso-yfti-irow: 8;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">6)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Cash flow for M/c/ Y(4+5)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">22000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">20000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">18000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">16000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">14000</div></td> </tr>
<tr style="mso-yfti-irow: 9;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">7)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Discount Factor @ 10%</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">0.909</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">0.826</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">0.751</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">0.683</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">0.621</div></td> </tr>
<tr style="mso-yfti-irow: 10;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">8)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Discounted value of cash flow of m/c ‘X’ (3 x 7)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">12726</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">13216</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">131518</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">13660</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">13662</div></td> </tr>
<tr style="mso-yfti-irow: 11;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">9)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Sum of Dis.Value of X (sum of 8)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">Rs.66782</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 12;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">10)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Dis.Value of m/c ‘Y’ (6-7)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">19998</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">16520</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">131518</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">10928</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">8694</div></td> </tr>
<tr style="mso-yfti-irow: 13; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 32.8pt;" valign="top" width="44"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">11)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 174.2pt;" valign="top" width="232"> <div class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: justify;">Sum of DV of m/c Y</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;">Rs.69658</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.4pt;" valign="top" width="59"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="center" class="MsoNormal" style="tab-stops: .5in 157.5pt; text-align: center;"><br />
</div></td> </tr>
</tbody></table><div class="MsoNormal" style="margin-left: .75in; mso-list: l0 level1 lfo1; tab-stops: .5in list .75in left 157.5pt; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="mso-list: Ignore;">(C)<span style="font: 7.0pt "Times New Roman";"> </span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;">Calculation of NPV<o:p></o:p></b></div><div class="MsoNormal" style="margin-left: .75in; tab-stops: .5in 157.5pt; text-align: justify;">Machine X:</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-bottom-style: none; border-collapse: collapse; border-color: initial; border-left-style: none; border-right-style: none; border-top-style: none; border-width: initial; margin-left: 0.7in; width: 576px;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 33.15pt;" valign="top" width="44"> <div class="MsoNormal">1)<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 353.85pt;" valign="top" width="472"> <div class="MsoNormal">Initial Investment<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="text-align: center;">56125<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 33.15pt;" valign="top" width="44"> <div class="MsoNormal">2)<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 353.85pt;" valign="top" width="472"> <div class="MsoNormal">Initial Investment in Working Capital<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="text-align: center;">10000<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 33.15pt;" valign="top" width="44"> <div class="MsoNormal">3)<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 353.85pt;" valign="top" width="472"> <div class="MsoNormal">Present Value of overhaulding expenses at the end of 3<sup>rd</sup> Year (25000x0.751<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="text-align: center;">18775<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 33.15pt;" valign="top" width="44"> <div class="MsoNormal">4)<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 353.85pt;" valign="top" width="472"> <div class="MsoNormal">PV of net cash flow of 1 through 5 years<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="text-align: center;">66782<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 33.15pt;" valign="top" width="44"> <div class="MsoNormal">5)<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 353.85pt;" valign="top" width="472"> <div class="MsoNormal">PV of terminal value at the end of 5 years</div><div class="MsoNormal">Salvage value<span style="mso-spacerun: yes;"> </span>3000</div><div class="MsoNormal">Recovery of working Capital<span style="mso-spacerun: yes;"> </span><u>10000<o:p></o:p></u></div><div class="MsoNormal"><span style="mso-spacerun: yes;"> </span>13,000</div><div class="MsoNormal"><span style="mso-spacerun: yes;"> </span>0.621<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="text-align: center;">8073<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 5; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 33.15pt;" valign="top" width="44"> <div class="MsoNormal">6)<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 353.85pt;" valign="top" width="472"> <div class="MsoNormal">Net Present Value (4+5-1-2-3)<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="text-align: center;">10042<o:p></o:p></div></td> </tr>
</tbody></table><div class="MsoNormal"><br />
</div><div class="MsoNormal" style="tab-stops: 51.75pt;"><span style="mso-tab-count: 1;"> </span>Machine Y:<o:p></o:p></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-bottom-style: none; border-collapse: collapse; border-color: initial; border-left-style: none; border-right-style: none; border-top-style: none; border-width: initial; margin-left: 0.7in; width: 576px;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 33.15pt;" valign="top" width="44"> <div class="MsoNormal">1)<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 353.85pt;" valign="top" width="472"> <div class="MsoNormal">Initial Investment<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="text-align: center;">56125<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 33.15pt;" valign="top" width="44"> <div class="MsoNormal">2)<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 353.85pt;" valign="top" width="472"> <div class="MsoNormal">Initial Investment in Working Capital<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="text-align: center;">10000<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 33.15pt;" valign="top" width="44"> <div class="MsoNormal">3)<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 353.85pt;" valign="top" width="472"> <div class="MsoNormal">PV of net cash flow of 1 through 5 years<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="text-align: center;">69658<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 33.15pt;" valign="top" width="44"> <div class="MsoNormal">4)<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 353.85pt;" valign="top" width="472"> <div class="MsoNormal">PV of terminal value at the end of 5 years</div><div class="MsoNormal">Salvage value<span style="mso-spacerun: yes;"> </span>3000</div><div class="MsoNormal">Recovery of working Capital<span style="mso-spacerun: yes;"> </span><u>10000<o:p></o:p></u></div><div class="MsoNormal"><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>13,000</div><div class="MsoNormal"><span style="mso-spacerun: yes;"> </span>0.621<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="text-align: center;">8073<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 4; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 33.15pt;" valign="top" width="44"> <div class="MsoNormal">5)<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 353.85pt;" valign="top" width="472"> <div class="MsoNormal">Net Present Value (4+5-1-2-3)<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="center" class="MsoNormal" style="text-align: center;">11606<o:p></o:p></div></td> </tr>
</tbody></table><div class="MsoNormal" style="tab-stops: 51.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 51.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 51.75pt;"><span style="mso-tab-count: 1;"> </span>Decision:</div><div class="MsoNormal" style="tab-stops: 51.75pt;"><span style="mso-tab-count: 1;"> </span>Select M/c ‘Y’ because the NPV of machine ‘Y’ is highest and positive.</div><div class="MsoNormal" style="line-height: 150%; text-align: justify;"><br />
</div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-56724306931724660752011-06-20T02:10:00.000-07:002011-06-20T02:10:52.486-07:00You are required to compute the degree of operating leverage, degree of financial language and degree of combined leverage.<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify; text-indent: -.5in;"><b style="mso-bidi-font-weight: normal;">The capital structure of Bombay Refrigeration Company Ltd. Consist of an equity share capital of Rs.3,00,000 (share of Rs.10 per value) and Rs.3,00,000 10% debentures. Sales increased by 20% from 30,000 to 36,000 units, the selling price are Rs.10 per unit. Variable cost Rs.6 Per unit and fixed costs amount to Rs.50,000. The company’s tax rate is 50%.<o:p></o:p></b></div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify; text-indent: -.5in;"><b style="mso-bidi-font-weight: normal;"><span style="mso-tab-count: 1;"> </span>You are required to compute the degree of operating leverage, degree of financial language and degree of combined leverage.<o:p></o:p></b></div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify; text-indent: -.5in;"><b style="mso-bidi-font-weight: normal;">Ans.<span style="mso-tab-count: 1;"> </span><o:p></o:p></b></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: 41.4pt; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 480;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><b style="mso-bidi-font-weight: normal;">Last Year<o:p></o:p></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><b style="mso-bidi-font-weight: normal;">Next Year<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">1)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Quantity</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">30000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">36000</div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">2)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Selling Price</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Rs.10</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Rs.10</div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">3)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Variable Costs</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Rs.6</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Rs.6</div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">4)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Contribution Per Unit</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Rs.4</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Rs.4</div></td> </tr>
<tr style="mso-yfti-irow: 5;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">5)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Contribution (1x4)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">120000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">144000</div></td> </tr>
<tr style="mso-yfti-irow: 6;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">6)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Fixed Costs</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">50000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">50000</div></td> </tr>
<tr style="mso-yfti-irow: 7;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">7)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">EBIT (5-6)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">70000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">94000</div></td> </tr>
<tr style="mso-yfti-irow: 8;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">8)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Interest</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">30000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">30000</div></td> </tr>
<tr style="mso-yfti-irow: 9;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">9)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Profit before Tax</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">40000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">64000</div></td> </tr>
<tr style="mso-yfti-irow: 10; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">10)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Profit after tax (50%x9)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">20000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">32000</div></td> </tr>
</tbody></table><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify; text-indent: -.5in;"><span style="mso-tab-count: 1;"> </span><span style="font-size: 11.0pt; mso-bidi-font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify; text-indent: -.5in;"><u><span style="font-size: 11.0pt; mso-bidi-font-size: 12.0pt;"><span style="mso-spacerun: yes;"> </span></span></u><span style="font-size: 11.0pt; mso-bidi-font-size: 12.0pt;"><span style="mso-spacerun: yes;"> </span>Change in EBIT %<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 46.5pt; mso-list: l0 level1 lfo1; tab-stops: list 46.5pt left 180.75pt; text-align: justify; text-indent: -19.5pt;"><!--[if !supportLists]--><span style="font-size: 11.0pt; mso-bidi-font-size: 12.0pt;"><span style="mso-list: Ignore;">(A)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><!--[if gte vml 1]><v:line
id="_x0000_s1027" style='position:absolute;left:0;text-align:left;z-index:2'
from="252pt,9.65pt" to="369pt,9.65pt"/><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: 335px; margin-top: 12px; mso-ignore: vglayout; position: absolute; width: 158px; z-index: 2;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image001.gif" v:shapes="_x0000_s1027" width="158" /></span><!--[endif]--><span style="font-size: 11.0pt; mso-bidi-font-size: 12.0pt;">Degrees of Operating Leverage (DDL) =<span style="mso-spacerun: yes;"> </span>x 100<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><span style="font-size: 11.0pt; mso-bidi-font-size: 12.0pt;"><span style="mso-tab-count: 3;"> </span>Change in contribution %<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 156.75pt; text-align: justify;"><span style="font-size: 11.0pt; mso-bidi-font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span>Change in EBIT<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: .5in; tab-stops: center 3.5in; text-align: justify;"><!--[if gte vml 1]><v:line
id="_x0000_s1026" style='position:absolute;left:0;text-align:left;z-index:1'
from="153pt,8.45pt" to="243pt,8.45pt"/><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: 203px; margin-top: 10px; mso-ignore: vglayout; position: absolute; width: 122px; z-index: 1;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image002.gif" v:shapes="_x0000_s1026" width="122" /></span><!--[endif]--><span style="font-size: 11.0pt; mso-bidi-font-size: 12.0pt;">Change in EBIT (%)<span style="mso-spacerun: yes;"> </span>= <span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>x 100<u><o:p></o:p></u></span></div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="font-size: 11.0pt; mso-bidi-font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>Original EBIT<o:p></o:p></span></div><div class="MsoNormal" style="tab-stops: 154.5pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-spacerun: yes;"> </span>24000</div><div class="MsoNormal" style="tab-stops: 154.5pt 210.75pt;"><!--[if gte vml 1]><v:line
id="_x0000_s1028" style='position:absolute;z-index:3' from="162pt,7.25pt"
to="198pt,7.25pt"/><![endif]--><!--[if !vml]--><span style="height: 2px; margin-left: 215px; margin-top: 9px; mso-ignore: vglayout; position: absolute; width: 50px; z-index: 3;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image003.gif" v:shapes="_x0000_s1028" width="50" /></span><!--[endif]--><span style="mso-spacerun: yes;"> </span>=<span style="mso-spacerun: yes;"> </span>x 100</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>70000</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-spacerun: yes;"> </span>=<span style="mso-spacerun: yes;"> </span>34.29%</div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><br />
</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify; text-indent: -.5in;"><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>Change in Contribution<o:p></o:p></div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><!--[if gte vml 1]><v:line
id="_x0000_s1029" style='position:absolute;left:0;text-align:left;z-index:4'
from="225pt,9.65pt" to="342pt,9.65pt"/><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: 299px; margin-top: 12px; mso-ignore: vglayout; position: absolute; width: 158px; z-index: 4;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image001.gif" v:shapes="_x0000_s1029" width="158" /></span><!--[endif]--><span style="mso-no-proof: yes;">Change in contribution change in %</span> =<span style="mso-spacerun: yes;"> </span>x 100</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>Contribution </div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-tab-count: 4;"> </span>24000</div><div class="MsoNormal" style="tab-stops: 154.5pt 210.75pt;"><!--[if gte vml 1]><v:line
id="_x0000_s1030" style='position:absolute;z-index:5' from="252pt,8.45pt"
to="4in,8.45pt"/><![endif]--><!--[if !vml]--><span style="height: 2px; margin-left: 335px; margin-top: 10px; mso-ignore: vglayout; position: absolute; width: 50px; z-index: 5;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image004.gif" v:shapes="_x0000_s1030" width="50" /></span><!--[endif]--><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 2;"> </span>=<span style="mso-spacerun: yes;"> </span>x 100</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 3;"> </span>120000</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-tab-count: 3;"> </span></div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-tab-count: 3;"> </span>= 20%</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-spacerun: yes;"> </span>34.29</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><!--[if gte vml 1]><v:line id="_x0000_s1031"
style='position:absolute;z-index:6' from="90pt,4.2pt" to="126pt,4.2pt"/><![endif]--><!--[if !vml]--><span style="height: 2px; margin-left: 119px; margin-top: 5px; mso-ignore: vglayout; position: absolute; width: 50px; z-index: 6;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image003.gif" v:shapes="_x0000_s1031" width="50" /></span><!--[endif]--><span style="mso-spacerun: yes;"> </span><st1:stockticker>DOL</st1:stockticker><span style="mso-spacerun: yes;"> </span>=<span style="mso-spacerun: yes;"> </span>x 100<span style="mso-spacerun: yes;"> </span></div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><span style="mso-spacerun: yes;"> </span>20</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><span style="mso-spacerun: yes;"> </span>= 171.45%</div><div class="MsoNormal"><br />
</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify; text-indent: -.5in;"><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>Change in PAT %<o:p></o:p></div><div class="MsoNormal" style="margin-left: 46.5pt; mso-list: l0 level1 lfo1; tab-stops: list 46.5pt left 180.75pt; text-align: justify; text-indent: -19.5pt;"><!--[if !supportLists]--><span style="mso-list: Ignore;">(B)<span style="font: 7.0pt "Times New Roman";"> </span></span><!--[endif]--><!--[if gte vml 1]><v:line id="_x0000_s1033" style='position:absolute;
left:0;text-align:left;z-index:8' from="252pt,9.65pt" to="369pt,9.65pt"/><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: 335px; margin-top: 12px; mso-ignore: vglayout; position: absolute; width: 158px; z-index: 8;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image001.gif" v:shapes="_x0000_s1033" width="158" /></span><!--[endif]-->Degrees of Financial<span style="mso-spacerun: yes;"> </span>Leverage (DFL) =<span style="mso-spacerun: yes;"> </span>x 100</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><span style="mso-tab-count: 3;"> </span><span style="mso-spacerun: yes;"> </span>Change in EBIT %</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 156.75pt; text-align: justify;"><span style="mso-tab-count: 1;"> </span>Change in PAT</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: center 3.5in; text-align: justify;"><!--[if gte vml 1]><v:line
id="_x0000_s1032" style='position:absolute;left:0;text-align:left;z-index:7'
from="153pt,8.45pt" to="243pt,8.45pt"/><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: 203px; margin-top: 10px; mso-ignore: vglayout; position: absolute; width: 122px; z-index: 7;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image002.gif" v:shapes="_x0000_s1032" width="122" /></span><!--[endif]-->Change in PAT (%)<span style="mso-spacerun: yes;"> </span>= <span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>x 100<u><o:p></o:p></u></div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>Original PAT</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-spacerun: yes;"> </span>12000</div><div class="MsoNormal" style="tab-stops: 154.5pt 210.75pt;"><!--[if gte vml 1]><v:line
id="_x0000_s1034" style='position:absolute;z-index:9' from="162pt,7.25pt"
to="198pt,7.25pt"/><![endif]--><!--[if !vml]--><span style="height: 2px; margin-left: 215px; margin-top: 9px; mso-ignore: vglayout; position: absolute; width: 50px; z-index: 9;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image003.gif" v:shapes="_x0000_s1034" width="50" /></span><!--[endif]--><span style="mso-spacerun: yes;"> </span>=<span style="mso-spacerun: yes;"> </span>x 100</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>20000</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-spacerun: yes;"> </span>=<span style="mso-spacerun: yes;"> </span>60 %</div><div class="MsoNormal"><br />
</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><span style="mso-spacerun: yes;"> </span>60</div><div class="MsoNormal" style="tab-stops: 154.5pt;"><!--[if gte vml 1]><v:line id="_x0000_s1035"
style='position:absolute;z-index:10' from="90pt,4.2pt" to="126pt,4.2pt"/><![endif]--><!--[if !vml]--><span style="height: 2px; margin-left: 119px; margin-top: 5px; mso-ignore: vglayout; position: absolute; width: 50px; z-index: 10;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image003.gif" v:shapes="_x0000_s1035" width="50" /></span><!--[endif]--><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>DFL<span style="mso-spacerun: yes;"> </span>=<span style="mso-spacerun: yes;"> </span>x 100<span style="mso-spacerun: yes;"> </span></div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><span style="mso-spacerun: yes;"> </span>34.29</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><span style="mso-spacerun: yes;"> </span>= 175%</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-left: 46.5pt; mso-list: l0 level1 lfo1; tab-stops: list 46.5pt left 180.75pt; text-align: justify; text-indent: -19.5pt;"><!--[if !supportLists]--><span style="mso-list: Ignore;">(C)<span style="font: 7.0pt "Times New Roman";"> </span></span><!--[endif]-->Degree of Combined leverage = <st1:stockticker>DOL</st1:stockticker> x DFL</div><div class="MsoNormal" style="margin-left: 27.0pt; tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-left: 27.0pt; tab-stops: 180.75pt; text-align: justify;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>= 171.45 x 175</div><div class="MsoNormal" style="margin-left: 27.0pt; tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-left: 27.0pt; tab-stops: 180.75pt; text-align: justify;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>= 30004.</div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-16302144508186150202011-06-20T02:07:00.001-07:002011-06-20T02:07:54.969-07:00From the following Balance sheets of Sriramco, prepare (a) Statement of Changes in Working Capital, and (b) Funds Flow Statement: Balance Sheet of Sriramco as on 31st December…<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><b style="mso-bidi-font-weight: normal;">From the following Balance sheets of Sriramco, prepare<o:p></o:p></b></div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><b style="mso-bidi-font-weight: normal;">(a) Statement of Changes in Working Capital, and (b) Funds Flow Statement: Balance Sheet of Sriramco as on 31<sup>st</sup> December…<o:p></o:p></b></div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><br />
</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: .45in; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 480;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td rowspan="4" style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 3.5in;" valign="top" width="336"> <div class="MsoNormal" style="tab-stops: 180.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Assets<o:p></o:p></i></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Good will<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Land and Buildings<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Plant<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Investments<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Book Debts<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Stock<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Cash in hand and at Bank<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Preliminary Expenses<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Liabilities<o:p></o:p></i></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Share capital<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Equity Share Capital<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">10% Red. Pref. Share Capital<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Capital Reserve<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">General Reserve<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">p. and L. Account<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Proposed Dividend<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Sundry Creditors<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Provision for Taxation<o:p></o:p></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">2000<o:p></o:p></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">2001<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div align="center" class="MsoNormal" style="tab-stops: 180.75pt; text-align: center;"><b style="mso-bidi-font-weight: normal;">Rs.<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">90,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">2,80,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">1,00,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">30,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">1,80,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">80,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">40,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">20,000<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="center" class="MsoNormal" style="tab-stops: 180.75pt; text-align: center;"><b style="mso-bidi-font-weight: normal;">Rs.<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">80,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">2,00,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">2,00,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">40,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">2,10,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">1,20,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">45,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">10,000<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">8,20,000<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">9,05,000<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">4,00,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">2,00,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">-<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">60,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">30,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">60,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">30,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">40,000<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">5,00,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">1,00,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">30,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">80,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">45,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">60,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">45,000<o:p></o:p></b></div><div align="right" class="MsoNormal" style="text-align: right;"><b style="mso-bidi-font-weight: normal;">45,000<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 4; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 3.5in;" valign="top" width="336"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.0in;" valign="top" width="96"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">8,20,000<o:p></o:p></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><b style="mso-bidi-font-weight: normal;">8,20,000<o:p></o:p></b></div></td> </tr>
</tbody></table><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify;"><b style="mso-bidi-font-weight: normal;">The following additional information is also available<o:p></o:p></b></div><div class="MsoNormal" style="margin-left: .75in; mso-list: l0 level1 lfo1; tab-stops: list .75in left 180.75pt; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="mso-list: Ignore;">(a)<span style="font: 7.0pt "Times New Roman";"> </span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;">A machine has been sold for Rs. 40,000 whose written down value was Rs. 36,000Deprteciation of Rs.15,000 has been charged on plant in 2001.<o:p></o:p></b></div><div class="MsoNormal" style="margin-left: .75in; mso-list: l0 level1 lfo1; tab-stops: list .75in left 180.75pt; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="mso-list: Ignore;">(b)<span style="font: 7.0pt "Times New Roman";"> </span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;">A piece of land has been sold out in 2001 and the profit on the sale has been credited capital reserve;<o:p></o:p></b></div><div class="MsoNormal" style="margin-left: .75in; mso-list: l0 level1 lfo1; tab-stops: list .75in left 180.75pt; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="mso-list: Ignore;">(c)<span style="font: 7.0pt "Times New Roman";"> </span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;">An interim dividend of Rs.30,000 has been paid in 2001;<o:p></o:p></b></div><div class="MsoNormal" style="margin-left: .75in; mso-list: l0 level1 lfo1; tab-stops: list .75in left 180.75pt; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="mso-list: Ignore;">(d)<span style="font: 7.0pt "Times New Roman";"> </span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;">Income tax paid during 2001 amounts to Rs. 45,000;<o:p></o:p></b></div><div class="MsoNormal" style="margin-left: .75in; mso-list: l0 level1 lfo1; tab-stops: list .75in left 180.75pt; text-align: justify; text-indent: -.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="mso-list: Ignore;">(e)<span style="font: 7.0pt "Times New Roman";"> </span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;">Preferences shares were redeemed at 5% premium.<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><b style="mso-bidi-font-weight: normal;">Ans. <o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><span style="mso-spacerun: yes;"> </span>(A) Funds from Operation calculation</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: .7in; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 480;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 333.0pt;" valign="top" width="444"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Increase in P & L</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">15000</div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 333.0pt;" valign="top" width="444"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Increase in G.R. Balance</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">20000</div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 333.0pt;" valign="top" width="444"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Less: Profit on <st1:city><st1:place>Sale</st1:place></st1:city> of Machine</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">4000</div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 333.0pt;" valign="top" width="444"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Add: Depreciation Provided</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">15000</div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 333.0pt;" valign="top" width="444"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Add: Interim Dividend</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">30000</div></td> </tr>
<tr style="mso-yfti-irow: 5;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 333.0pt;" valign="top" width="444"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Add: Provision for Dividend</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">60000</div></td> </tr>
<tr style="mso-yfti-irow: 6;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 333.0pt;" valign="top" width="444"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Add: Provision for Taxation</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">50000</div></td> </tr>
<tr style="mso-yfti-irow: 7;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 333.0pt;" valign="top" width="444"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Less: Redemption Premium on Preferences shares (100000x5%)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">5000</div></td> </tr>
<tr style="mso-yfti-irow: 8;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 333.0pt;" valign="top" width="444"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Add: Preliminary expenses written off</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">10000</div></td> </tr>
<tr style="mso-yfti-irow: 9;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 333.0pt;" valign="top" width="444"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Add: Goodwill Written off</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">10000</div></td> </tr>
<tr style="mso-yfti-irow: 10; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 333.0pt;" valign="top" width="444"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Funds from operations</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">201000</div></td> </tr>
</tbody></table><div class="MsoNormal" style="text-indent: .5in;"><br />
</div><div class="MsoNormal"><br />
</div><div class="MsoNormal" style="text-indent: .5in;">(B) Statement Showing Changes in Working Capital</div><div class="MsoNormal" style="text-indent: .5in;"><br />
</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: .7in; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 480;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 189.0pt;" valign="top" width="252"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Increase in W/C</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 98.8pt;" valign="top" width="132"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Decrease in W/C</div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 189.0pt;" valign="top" width="252"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Increase in Book debts</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">30000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 98.8pt;" valign="top" width="132"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 189.0pt;" valign="top" width="252"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Increase in stock</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">40000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 98.8pt;" valign="top" width="132"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 189.0pt;" valign="top" width="252"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Increase in Cash and Bank</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">5000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 98.8pt;" valign="top" width="132"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 189.0pt;" valign="top" width="252"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Increase in Sundry creditors</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 98.8pt;" valign="top" width="132"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">15000</div></td> </tr>
<tr style="mso-yfti-irow: 5;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 189.0pt;" valign="top" width="252"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">75000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 98.8pt;" valign="top" width="132"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">15000</div></td> </tr>
<tr style="mso-yfti-irow: 6;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 189.0pt;" valign="top" width="252"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Net Increase in Working Capital</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 98.8pt;" valign="top" width="132"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">60000</div></td> </tr>
<tr style="mso-yfti-irow: 7; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 189.0pt;" valign="top" width="252"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">75000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 98.8pt;" valign="top" width="132"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">75000</div></td> </tr>
</tbody></table><div class="MsoNormal"><br />
</div><div class="MsoNormal" style="margin-left: 27.0pt;">(C) Funds Flow Statement Calculation</div><div class="MsoNormal" style="margin-left: 46.5pt;">Sources:</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: .7in; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 480;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 153.0pt;" valign="top" width="204"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Funds from operations</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">201000</div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 153.0pt;" valign="top" width="204"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><st1:city><st1:place>Sale</st1:place></st1:city> of Machinery</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">40000</div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 153.0pt;" valign="top" width="204"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><st1:city><st1:place>Sale</st1:place></st1:city> of land (80000 + 30000)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">110000</div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 153.0pt;" valign="top" width="204"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Issue of equity share capital</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">100000</div></td> </tr>
<tr style="mso-yfti-irow: 4; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 153.0pt;" valign="top" width="204"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Total </div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">451000</div></td> </tr>
</tbody></table><div class="MsoNormal" style="margin-left: 46.5pt;"><br />
</div><div class="MsoNormal" style="text-indent: .5in;">Applications<o:p></o:p></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: .7in; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 480;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 297.0pt;" valign="top" width="396"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Net Increase in working capital</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">60000</div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 297.0pt;" valign="top" width="396"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Dividend of 2000 paid</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">60000</div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 297.0pt;" valign="top" width="396"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Interim Dividend paid</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">30000</div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 297.0pt;" valign="top" width="396"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Income Tax Paid</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">45000</div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 297.0pt;" valign="top" width="396"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Redemption of Preferences Shares (100000+5000)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">105000</div></td> </tr>
<tr style="mso-yfti-irow: 5;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 297.0pt;" valign="top" width="396"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Purchase of plant </div><div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">(100000-36000-15000) = 49000 less cl. Value Rs.2 lakh</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">151000</div></td> </tr>
<tr style="mso-yfti-irow: 6; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 297.0pt;" valign="top" width="396"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Total </div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">451000</div></td> </tr>
</tbody></table><div class="MsoNormal" style="tab-stops: 45.75pt;"><span style="mso-tab-count: 1;"> </span></div><div class="MsoNormal" style="tab-stops: 45.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 45.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 45.75pt;">Working Note:</div><div class="MsoNormal" style="tab-stops: 45.75pt;"><span style="mso-tab-count: 1;"> </span>Provision for Taxation</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: .7in; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 480;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">To Bank</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">45000</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.15pt;" valign="top" width="134"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">Opening</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 52.85pt;" valign="top" width="70"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">40000</div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.15pt;" valign="top" width="134"> <div align="center" class="MsoNormal" style="tab-stops: 180.75pt; text-align: center;">Provision of yeas</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 52.85pt;" valign="top" width="70"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">50000</div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">closing</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">45000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.15pt;" valign="top" width="134"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 52.85pt;" valign="top" width="70"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 3; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">90000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.15pt;" valign="top" width="134"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 52.85pt;" valign="top" width="70"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">90000</div></td> </tr>
</tbody></table><div class="MsoNormal" style="tab-stops: 45.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 45.75pt; text-indent: .5in;"><span style="mso-spacerun: yes;"> </span>Plant A/C</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: .7in; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 480;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">To Opening</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">100000</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.15pt;" valign="top" width="134"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">By Disposal a/c</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 52.85pt;" valign="top" width="70"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">36000</div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">To Bank (Purchases)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">151000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.15pt;" valign="top" width="134"> <div class="MsoNormal" style="tab-stops: 180.75pt;">By Depreciation</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 52.85pt;" valign="top" width="70"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">15000</div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;">closing</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.15pt;" valign="top" width="134"> <div class="MsoNormal" style="tab-stops: 180.75pt;">By Closing</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 52.85pt;" valign="top" width="70"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">200000</div></td> </tr>
<tr style="mso-yfti-irow: 3; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.25in;" valign="top" width="120"> <div class="MsoNormal" style="tab-stops: 180.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="top" width="72"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">251000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.15pt;" valign="top" width="134"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 52.85pt;" valign="top" width="70"> <div align="right" class="MsoNormal" style="tab-stops: 180.75pt; text-align: right;">251000</div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: 150%; tab-stops: 3.5in; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-left: .5in; tab-stops: 180.75pt; text-align: justify; text-indent: -.5in;"><br />
</div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-70208527037552961012011-06-20T02:06:00.000-07:002011-06-20T02:06:19.463-07:00The following is the Trail Balance of a trader as at 31st December, 2001<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="tab-stops: 51.75pt;"><b style="mso-bidi-font-weight: normal;">The following is the Trail Balance of a trader as at 31<sup>st</sup> December, 2001<o:p></o:p></b></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: 5.4pt; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 480;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="top" width="228"> <div class="MsoNormal" style="tab-stops: 51.75pt;"><b style="mso-bidi-font-weight: normal;">Debit Balances<o:p></o:p></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div class="MsoNormal" style="tab-stops: 51.75pt;"><b style="mso-bidi-font-weight: normal;">Rs.<o:p></o:p></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.5in;" valign="top" width="240"> <div class="MsoNormal" style="tab-stops: 51.75pt;"><b style="mso-bidi-font-weight: normal;">Credit Balances<o:p></o:p></b></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 59.4pt;" valign="top" width="79"> <div class="MsoNormal" style="tab-stops: 51.75pt;"><b style="mso-bidi-font-weight: normal;">Rs.<o:p></o:p></b></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td rowspan="2" style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="top" width="228"> <div class="MsoNormal" style="tab-stops: 51.75pt;">Stock (1-1-2001)</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Sales returns </div><div class="MsoNormal" style="tab-stops: 51.75pt;">Purchases</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Freight and carriage</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Rate, rent etc.</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Salaries and wages</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Sundry debtors</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Bank Interest</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Printing and advertisement </div><div class="MsoNormal" style="tab-stops: 51.75pt;">Cash at Bank</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Investments</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Furniture and fittings</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Discounts</div><div class="MsoNormal" style="tab-stops: 51.75pt;">General expense</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Audit Fees</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Insurance</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Travelling expenses</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Postage and telegrams</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Cash in hand</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Deposit with plan</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Drawing Account</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">46,800</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">8,600</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">2,43,100</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">18,600</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">5,700</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">9,300</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">24,000</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">900</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">14,600</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">8,000</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">5,000</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">1,800</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">7,540</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">3,910</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">700</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">600</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">2,330</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">870</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">380</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">30,000</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;">10,000</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.5in;" valign="top" width="240"> <div class="MsoNormal" style="tab-stops: 51.75pt;">Neeru’s Capital account</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Sales</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Purchase returns</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Sundry creditors</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Bank loan at 6%</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Income from investments</div><div class="MsoNormal" style="tab-stops: 51.75pt;">Discounts</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 59.4pt;" valign="top" width="79"> <div class="MsoNormal" style="tab-stops: 51.75pt;">1,08,090</div><div class="MsoNormal" style="tab-stops: 51.75pt;">2,89,600</div><div class="MsoNormal" style="tab-stops: 51.75pt;">5,800</div><div class="MsoNormal" style="tab-stops: 51.75pt;">14,800</div><div class="MsoNormal" style="tab-stops: 51.75pt;">20,000</div><div class="MsoNormal" style="tab-stops: 51.75pt;">250</div><div class="MsoNormal" style="tab-stops: 51.75pt;">4,190</div></td> </tr>
<tr style="mso-yfti-irow: 2; mso-yfti-lastrow: yes;"> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 63.0pt;" valign="top" width="84"> <div class="MsoNormal" style="tab-stops: 51.75pt;">4,42,730</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.5in;" valign="top" width="240"> <div class="MsoNormal" style="tab-stops: 51.75pt;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 59.4pt;" valign="top" width="79"> <div class="MsoNormal" style="tab-stops: 51.75pt;">4,42,730</div></td> </tr>
</tbody></table><div class="MsoNormal" style="tab-stops: 51.75pt;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; mso-line-height-rule: exactly; tab-stops: 51.75pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Adjustments:<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; mso-line-height-rule: exactly; tab-stops: 51.75pt;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(i)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Stock at the end was Rs.78,600<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(ii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Included amongst the debtors is Rs. 3,000 due from Zeenat and included amongst the creditors is Rs.1,000 due to her.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(iii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">The effect of advertising not yet expired, a quarter of the amongst ‘Printing and advertising’ is to be carried forward to the next year.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(iv)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Reserve 2 per cent for discount on Debtors and create a bad debts reserve at 5 per cent.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(v)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">A depreciation of 10% p.a. is to be written off Furniture and fittings.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(vi)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Wages owing on </span></b><st1:date day="31" month="12" year="2001"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">31<sup>st</sup> December, 2001</span></b></st1:date><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"> is Rs.300, salaries owing Rs.500 and carriage owing Rs.100.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(vii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Prepaid insurance is Rs.80.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(viii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Furniture which stood at Rs.600 in books </span></b><st1:date day="1" month="1" year="2001"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">1st January, 2001</span></b></st1:date><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"> was deposited of at Rs.290 on June, in part exchange for new furniture costing Rs.520. A net invoice at Rs.230 was passed through the purchase – day book.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(ix)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Purchase Invoice amounting to Rs.400 has been omitted from the books.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(x)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">A Neon – sign costing Rs.100 is included in Advertising.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(xi)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Two dishonored cheQ. For Rs.200 and Rs.300 respectively has not been entered in the cast book. The first for Rs.200 is known to be bad. In the case of a second cheque for Rs. 300, it is expected that 75% of it would be realized.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(xii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Private purchase amounting to Rs.600 has been included in the Purchase Day book.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(xiii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Charge full year’s interest on Deposit with Pran at 7% p.a.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; tab-stops: 51.75pt list .75in; text-align: justify; text-indent: -.5in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;"><span style="mso-list: Ignore;">(xiv)<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Provide for interest on Bank loan for the amount due.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; tab-stops: 51.75pt; text-align: justify;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 11.0pt;">Prepare Final Accounts.<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; tab-stops: 51.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; tab-stops: 51.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; tab-stops: 51.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; tab-stops: 51.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-left: .75in; mso-line-height-rule: exactly; tab-stops: 51.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-left: .75in; tab-stops: 51.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><b style="mso-bidi-font-weight: normal;">Ans. <span style="mso-tab-count: 1;"> </span>Trading A/c<o:p></o:p></b></div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-bottom-style: none; border-collapse: collapse; border-color: initial; border-left-style: none; border-right-style: none; border-top-style: none; border-width: initial; margin-left: 0.2in; width: 648px;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Opening stock<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">46800<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Purchase:<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">243100<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">By Sales<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">289600<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">As per TB</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">5800<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Sales Returns</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">8600</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">281000<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Purchase Returns</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">400<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Receivable Bad Debts</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">225<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Add: Unbooked</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">600<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">By closing stock</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">78600<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 5;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Drawings</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">230<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 6;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Pay for furniture</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">236870<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 7;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 8;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Fright and Carriages</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 9;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">As per TB</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">18600<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 10;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Add O/S</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">100<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">18700<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 11;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 12;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To P&L Account (Gross Profit)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">57455<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 13; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.35in;" valign="top" width="226"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">Total<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">359825<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.85in;" valign="top" width="178"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .65in;" valign="top" width="62"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Total</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">359825<o:p></o:p></div></td> </tr>
</tbody></table><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div><div align="center" class="MsoNormal" style="tab-stops: 51.75pt; text-align: center;"><b style="mso-bidi-font-weight: normal;">Profit and Loss A/c<o:p></o:p></b></div><div class="MsoNormal"><br />
</div><div class="MsoNormal" style="tab-stops: 192.75pt;"><span style="mso-tab-count: 1;"> </span><o:p></o:p></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-bottom-style: none; border-collapse: collapse; border-color: initial; border-left-style: none; border-right-style: none; border-top-style: none; border-width: initial; margin-left: 23.4pt; width: 576px;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">By Trading Account<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">57488<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Postage<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">870<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">By Income from Investments<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">250<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Travelling Expenses<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">2330<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">By Discount<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">4190<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Rent, Rates, & Taxes<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">5700<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">By Outstanding Interest on Deposit with Pran <o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">2100<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 4;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Dep. On Furniture<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">172<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 5;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Salaries &<span style="mso-spacerun: yes;"> </span>Wages:<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 6;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">As per TB<o:p></o:p></div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Add O/S Salaries <o:p></o:p></div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Add O/S Wages <o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">9300<o:p></o:p></div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">500<o:p></o:p></div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">300<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">10100<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 7;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Printing & Adult<o:p></o:p></div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">As per TB<o:p></o:p></div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Prepaid <span style="font-size: 10.0pt;">(146001000x1/4)</span><o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">14600</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">3400<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">11200<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 8;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Insurance</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Prepaid<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">600</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">80<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">520<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 9;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Discount<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">7540<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 10;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Bank Interest</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">As Per TB</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">O/S Interest <o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">900</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">300<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">1200<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 11;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To general expenses<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">3910<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 12;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Audit Fees<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">700<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 13;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To bad & Doubtful Debts</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">B.D.</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Prov. For B.D</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Prov. For B.D<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">200</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">75</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">1148<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;">1423<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 14;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Prov. For Discount</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">436<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 15;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Loss on Furniture</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Sales (600-290)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">310<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 16;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">To Capital (net Profit)</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">17584<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 17; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 160.25pt;" valign="top" width="214"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.8pt;" valign="top" width="54"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">Total<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.65pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">63995<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 141.45pt;" valign="top" width="189"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Total <o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 44.85pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">63995<o:p></o:p></div></td> </tr>
</tbody></table><div class="MsoNormal" style="tab-stops: 192.75pt;"><br />
</div><div class="MsoNormal" style="tab-stops: 180.75pt;"><b style="mso-bidi-font-weight: normal;">Balance Sheet<o:p></o:p></b></div><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-bottom-style: none; border-collapse: collapse; border-color: initial; border-left-style: none; border-right-style: none; border-top-style: none; border-width: initial; margin-left: 5.4pt; width: 624px;"><tbody>
<tr style="mso-yfti-irow: 0;"> <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Capital:</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">As per TB</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Add: Net Profit</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Drawings</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less:Private Purchases<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">108090</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">17584</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">10000</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">600<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">115074<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Furniture & Fitting:</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">As per TB</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Sold</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Add: Purchase</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: depreciation @ 10%<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">1800</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">600</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">520</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">172<o:p></o:p></div></td> <td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">1720</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">1548<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 1;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Investments<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">5000<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 2;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Deposit with Plan</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Add: Interest O/S @ 7%<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">30000</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">2100<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">32100<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 3;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Bank load @ 6%<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">20000<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Sundry Debtors:<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> </tr>
<tr style="height: 55.0pt; mso-yfti-irow: 4;"> <td style="border-top: none; border: solid windowtext 1.0pt; height: 55.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Sundry Creditors:<o:p></o:p></div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">As per TB</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Zeenat</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Add: Unbooked<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 55.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">14800</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">1000</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">400<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 55.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;"><br />
</div><div align="right" class="MsoNormal" style="text-align: right;">14200<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 55.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">As per TB</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Zeenat</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less B: Debt</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Add: Receivable</div><div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Prov for BD<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 55.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">24000</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">1000</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">200</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">225</div><div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">75<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 55.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 5;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Prov: for Bad debt<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">1148<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> </tr>
<tr style="mso-yfti-irow: 6;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Outstanding</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Less: Discount @ 5% Res.<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">436<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">78600<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 7;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Salaries</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">500<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Prepaid Printing & Audit<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">3400<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 8;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Wages</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">300<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Prepaid Insurance<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">80<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 9;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Carriage</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">100<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Cash at bank<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">8000<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 10;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Bank Interest</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">300<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">1200<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;">Cash in hand<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">380<o:p></o:p></div></td> </tr>
<tr style="mso-yfti-irow: 11; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;" valign="top" width="168"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">Total <o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">150474<o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.25in;" valign="top" width="216"> <div class="MsoNormal" style="tab-stops: 51.75pt; text-align: justify;"><br />
</div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">Total <o:p></o:p></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 45.0pt;" valign="top" width="60"> <div align="right" class="MsoNormal" style="tab-stops: 51.75pt; text-align: right;">150474<o:p></o:p></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: 150%; text-align: justify;"><br />
</div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com1tag:blogger.com,1999:blog-6717078704597438349.post-90869284267710470072011-06-20T02:02:00.001-07:002011-06-20T02:02:52.269-07:00Explain the accounting concepts<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><b><span style="font-size: 11.0pt;">Explain the accounting concepts<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><b><span style="font-size: 11.0pt; mso-bidi-font-style: italic;">CONVENTION OF CONSERVATION</span></b><span style="font-size: 11.0pt;">: <o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="font-size: 11.0pt;">It is a world of uncertainty. So it is always better to pursue the policy of playing safe. This is the principle behind the convention of conservatism. According to this convention the accountant must be very careful while recognizing increases in an enterprise’s profits rather than recognizing decreases in profits. For this the accountants have to follow the rule, anticipate no profit, provide for all possible losses, while recording business transactions. It is on account of this convention that the inventory is valued `at cost or market price whichever is less’, i.e. when the market price of the inventories has fallen below its cost price it is shown at market price i.e. the possible loss is provided and when it is above the cost price it is shown at cost price i.e. the anticipated profit is not recorded. It is for the same reason that provision for bad and doubtful debts, provision for fluctuation in investments, etc., are created. This concept affects principally the current assets.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><b><span style="font-size: 11.0pt;">ACCOUNTING PERIOD CONCEPT<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="font-size: 11.0pt;">All the transactions are recorded in the books of accounts on the assumption that profits on these transactions are to be ascertained for a specified period. This is known as accounting period concept. Thus, this concept requires that a balance sheet and profit and loss account should be prepared at regular intervals. This is necessary for different purposes like, calculation of profit, ascertaining financial position, tax computation etc. Further, this concept assumes that, indefinite life of business is divided into parts. These parts are known as Accounting Period. It may be of one year, six months, three months, one month, etc. But usually one year is taken as one accounting period which may be a calendar year or a financial year. Year that begins from 1st of January and ends on 31st of December, is known as Calendar Year. The year that begins from 1st of April and ends on 31st of March of the following year, is known as financial year. As per accounting period concept, all the transactions are recorded in the books of accounts for a specified period of time. Hence, goods purchased and sold during the period, rent, salaries etc. paid for the period are accounted for and against that period only.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><b><span style="font-size: 11.0pt;">Significance<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l3 level1 lfo1; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It helps in predicting the future prospects of the business.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l3 level1 lfo1; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It helps in calculating tax on business income calculated for a particular time period.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l3 level1 lfo1; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It also helps banks, financial institutions, creditors, etc to assess and analyze the performance of business for a particular period.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l3 level1 lfo1; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It also helps the business firms to distribute their income at regular intervals as dividends.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><b><span style="font-size: 11.0pt;">ACCOUNTING </span></b><st1:stockticker><b><span style="font-size: 11.0pt;">COST</span></b></st1:stockticker><b><span style="font-size: 11.0pt;"> CONCEPT<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="font-size: 11.0pt;">Accounting cost concept states that all assets are recorded in the books of accounts at their purchase price, which includes cost of acquisition, transportation and installation and not at its market price. It means that fixed assets like building, plant and machinery, furniture, etc are recorded in the books of accounts at a price paid for them. For example, a machine was purchased by XYZ Limited for Rs.500000, for manufacturing shoes. An amount of Rs.1,000 were spent on transporting the machine to the factory site. In addition, Rs.2000 was spent on its installation. The total amount at which the machine will be recorded in the books of accounts would be the sum of all these items i.e. Rs.503000. This cost is also known as historical cost. Suppose the market price of the same is now Rs 90000 it will not be shown at this value. Further, it may be clarified that cost means original or acquisition cost only for new assets and for the used ones, cost means original cost less depreciation. The cost concept is also known as historical cost concept. The effect of cost concept is that if the business entity does not pay anything for acquiring an asset this item would not appear in the books of accounts. Thus, goodwill appears in the accounts only if the entity has purchased this intangible asset for a price.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><b><span style="font-size: 11.0pt;">Significance<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l1 level1 lfo2; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">This concept requires asset to be shown at the price it has been acquired, which can be verified from the supporting documents.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l1 level1 lfo2; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It helps in calculating depreciation on fixed assets.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l1 level1 lfo2; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">The effect of cost concept is that if the business entity does not pay anything for an asset, this item will not be shown in the books of accounts<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><b><span style="font-size: 11.0pt;">ACCOUNTING PERIOD CONCEPT<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="font-size: 11.0pt;">All the transactions are recorded in the books of accounts on the assumption that profits on these transactions are to be ascertained for a specified period. This is known as accounting period concept. Thus, this concept requires that a balance sheet and profit and loss account should be prepared at regular intervals. This is necessary for different purposes like, calculation of profit, ascertaining financial position, tax computation etc. Further, this concept assumes that, indefinite life of business is divided into parts. These parts are known as Accounting Period. It may be of one year, six months, three months, one month, etc. But usually one year is taken as one accounting period which may be a calendar year or a financial year. Year that begins from 1st of January and ends on 31st of December, is known as Calendar Year. The year that begins from 1st of April and ends on 31st of March of the following year, is known as financial year. As per accounting period concept, all the transactions are recorded in the books of accounts for a specified period of time. Hence, goods purchased and sold during the period, rent, salaries etc. paid for the period are accounted for and against that period only.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><b><span style="font-size: 11.0pt;">Significance<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l2 level1 lfo3; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It helps in predicting the future prospects of the business.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l2 level1 lfo3; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It helps in calculating tax on business income calculated for a particular time period.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l2 level1 lfo3; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It also helps banks, financial institutions, creditors, etc to assess and analyze the performance of business for a particular period.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l2 level1 lfo3; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It also helps the business firms to distribute their income at regular intervals as dividends.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><b><span style="font-size: 11.0pt;">MONEY MEASUREMENT CONCEPT<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none; text-indent: .5in;"><span style="font-size: 11.0pt;">This concept assumes that all business transactions must be in terms of money that is in the currency of a country. In our country such transactions are in terms of rupees. Thus, as per the money measurement concept, transactions which can be expressed in terms of money are recorded in the books of accounts. For example, sale of goods worth Rs.200000, purchase of raw materials Rs.100000, Rent Paid Rs.10000 etc. are expressed in terms of money, and so they are recorded in the books of accounts. But the transactions which cannot be expressed in monetary terms are not recorded in the books of accounts. For example, sincerity, loyalty, honesty of employees are not recorded in books of accounts because these cannot be measured in terms of money although they do affect the profits and losses of the business concern. Another aspect of this concept is that the records of the transactions are to be kept not in the physical units but in the monetary unit. For example, at the end of the year 2006, an organization may have a factory on a piece of land measuring 10 acres, office building containing 50 rooms, 50 personal computers, 50 office chairs and tables, 100 kg of raw materials etc. These are expressed in different units. But for accounting purposes they are to be recorded in money terms i.e. in rupees. In this case, the cost of factory land may be say Rs.12 crore, office building of Rs.10 crore, computers Rs.10 lakhs, office chairs and tables Rs.2 lakhs, raw material Rs.30 lakhs. Thus, the total assets of the organization are valued at Rs.22 crore and Rs.42 lakhs. Therefore, the transactions which can be expressed in terms of money is recorded in the accounts books, that too in terms of money and not in terms of the quantity.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none; text-indent: .5in;"><br />
</div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><b><u><span style="font-size: 11.0pt;">Significance<o:p></o:p></span></u></b></div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><span style="font-size: 11.0pt;"><span style="mso-tab-count: 1;"> </span>The following points highlight the significance of money measurement Concept:<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l0 level1 lfo4; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">This concept guides accountants what to record and what not to record.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l0 level1 lfo4; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">It helps in recording business transactions uniformly.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l0 level1 lfo4; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 11.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 11.0pt;">If all the business transactions are expressed in monetary terms, it will be easy to understand the accounts prepared by the business enterprise.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 15.0pt; margin-left: .5in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-list: l0 level1 lfo4; text-align: justify; text-autospace: none; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]-->It facilitates comparison of business performance of two different periods of the same firm or of the two different firms for the same period.</div><div class="MsoNormal" style="line-height: 15.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; text-align: justify; text-autospace: none;"><br />
</div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-67264972245618234342011-06-20T02:01:00.000-07:002011-06-20T02:01:28.407-07:00The Finance Director of Ritoria Ltd thinks that the project with the higher NPV should be chosen whereas its Managing Director thinks that the one with the higher IRR should be undertaken<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="margin-left: .5in; text-align: justify; text-indent: -.5in;">The Finance Director of Ritoria Ltd thinks that the project with the higher NPV should be chosen whereas its Managing Director thinks that the one with the higher IRR should be undertaken, especially as both projects have the same initial outlay and length of life. The company anticipates a cost of capital of 10% and the net after tax</div><div class="MsoNormal" style="text-align: justify;"><span style="color: black; font-family: Arial; font-size: 10.0pt;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><br />
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</div><div class="MsoNormal" style="text-align: justify;"><span style="color: black; font-family: Arial; font-size: 10.0pt;"><span style="mso-spacerun: yes;"> </span>cash flows of the projects are as follows:<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><!--[if gte vml 1]><v:line id="_x0000_s1026"
style='position:absolute;left:0;text-align:left;z-index:1' from="0,0" to="6in,0"/><![endif]--><!--[if !vml]--><span style="mso-ignore: vglayout; position: relative; z-index: 1;"><span style="height: 2px; left: -1px; left: 0px; position: absolute; top: -1px; width: 578px;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image001.gif" v:shapes="_x0000_s1026" width="578" /></span></span><!--[endif]--><span style="color: black; font-family: Arial; font-size: 10.0pt;"><span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 1;"> </span>Year<span style="mso-tab-count: 4;"> </span>0<span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 1;"> </span>1<span style="mso-tab-count: 1;"> </span>2<span style="mso-tab-count: 1;"> </span>3<span style="mso-tab-count: 1;"> </span>4<span style="mso-tab-count: 1;"> </span>5<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><!--[if gte vml 1]><v:line id="_x0000_s1027"
style='position:absolute;left:0;text-align:left;z-index:2' from=".1pt,.75pt"
to="432.1pt,.75pt"/><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -1px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 578px; z-index: 2;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image001.gif" v:shapes="_x0000_s1027" width="578" /></span><!--[endif]--><span style="color: black; font-family: Arial; font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>(Cash Flows figs 000) <o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: black; font-family: Arial; font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Project X<span style="mso-tab-count: 2;"> </span><span style="mso-spacerun: yes;"> </span>Rs.<span style="mso-tab-count: 1;"> </span>(200)<span style="mso-tab-count: 2;"> </span>35<span style="mso-tab-count: 1;"> </span>80<span style="mso-tab-count: 1;"> </span>90<span style="mso-tab-count: 1;"> </span>75<span style="mso-tab-count: 1;"> </span>20<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span style="color: black; font-family: Arial; font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Project Y<span style="mso-tab-count: 2;"> </span><span style="mso-spacerun: yes;"> </span>Rs. (200)<span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>218<span style="mso-tab-count: 1;"> </span>10<span style="mso-tab-count: 1;"> </span>10<span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>4<span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>3<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><!--[if gte vml 1]><v:line id="_x0000_s1028"
style='position:absolute;left:0;text-align:left;z-index:3' from=".2pt,1.5pt"
to="432.2pt,1.5pt"/><![endif]--><!--[if !vml]--><span style="height: 3px; left: -1px; mso-ignore: vglayout; position: relative; top: 1px; width: 578px; z-index: 3;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image001.gif" v:shapes="_x0000_s1028" width="578" /></span><!--[endif]--><span style="color: black; font-family: Arial; font-size: 10.0pt;"><o:p> </o:p></span></div><br clear="ALL" style="mso-ignore: vglayout;" /> <div class="MsoNormal" style="text-align: justify;"><span style="color: black; font-family: Arial; font-size: 10.0pt;"><span style="mso-spacerun: yes;"> </span>You are required to :<o:p></o:p></span></div><ol start="1" style="margin-top: 0in;" type="a"><li class="MsoNormal" style="color: black; mso-list: l0 level1 lfo1; tab-stops: list .5in; text-align: justify;"><span style="font-family: Arial; font-size: 10.0pt;">Calculate the NPV and IRR of each project.<o:p></o:p></span></li>
<li class="MsoNormal" style="color: black; mso-list: l0 level1 lfo1; tab-stops: list .5in; text-align: justify;"><span style="font-family: Arial; font-size: 10.0pt;">State, with reasons, which of the two mutually exclusive projects you would recommend.<o:p></o:p></span></li>
<li class="MsoNormal" style="color: black; mso-list: l0 level1 lfo1; tab-stops: list .5in; text-align: justify;"><span style="font-family: Arial; font-size: 10.0pt;">Explain the reasons for inconsistency in the ranking of the two projects.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></li>
</ol><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><br />
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</div><div class="MsoNormal" style="text-align: justify;"><b><span style="color: black; font-family: Arial; font-size: 10.0pt;">Solution: BY NPV METHOD</span></b><span style="color: black; font-family: Arial; font-size: 10.0pt;">:<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">NPV is the sum of all terms <span style="mso-spacerun: yes;"> </span><!--[if gte vml 1]><v:shapetype
id="_x0000_t75" coordsize="21600,21600" o:spt="75" o:preferrelative="t"
path="m@4@5l@4@11@9@11@9@5xe" filled="f" stroked="f"> <v:stroke joinstyle="miter"/> <v:formulas> <v:f eqn="if lineDrawn pixelLineWidth 0"/> <v:f eqn="sum @0 1 0"/> <v:f eqn="sum 0 0 @1"/> <v:f eqn="prod @2 1 2"/> <v:f eqn="prod @3 21600 pixelWidth"/> <v:f eqn="prod @3 21600 pixelHeight"/> <v:f eqn="sum @0 0 1"/> <v:f eqn="prod @6 1 2"/> <v:f eqn="prod @7 21600 pixelWidth"/> <v:f eqn="sum @8 21600 0"/> <v:f eqn="prod @7 21600 pixelHeight"/> <v:f eqn="sum @10 21600 0"/> </v:formulas> <v:path o:extrusionok="f" gradientshapeok="t" o:connecttype="rect"/> <o:lock v:ext="edit" aspectratio="t"/> </v:shapetype><v:shape id="_x0000_i1026" type="#_x0000_t75" alt="\frac{R_t}{(1+i)^{t}}"
style='width:45pt;height:34.5pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image002.gif"
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</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">-200/(1.1)=-200<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;"><span style="mso-spacerun: yes;"> </span>35/1.1=31.82<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;"><span style="mso-spacerun: yes;"> </span>80/1.21=66.21<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;"><span style="mso-spacerun: yes;"> </span>90/1.331=67.62<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;"><span style="mso-spacerun: yes;"> </span>75/1.4641=51.23<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;"><span style="mso-spacerun: yes;"> </span>20/1.61051=12.42<span style="mso-spacerun: yes;"> </span>here 200-all 5 above<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">200-229.21=<span style="mso-spacerun: yes;"> </span>-29.21 for x<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">For y:<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">-200/1.1=-200<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">218/1.1=198.18<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">10/1.21=8.26<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">10/1.331=7.51<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">4/1.4641=2.73<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">3/1.61051=1.86<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">Here 200- all 5 above<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">200-218.54 = -18.54<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><b><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">BY IRR METHOD:<o:p></o:p></span></b></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">rate of return is given by <span class="texhtml1"><span style="mso-ansi-font-size: 10.0pt; mso-bidi-font-size: 10.0pt;">r</span></span> in:<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;"><!--[if gte vml 1]><v:shape
id="_x0000_i1025" type="#_x0000_t75" alt="\mbox{NPV} = \sum_{n=0}^{N} \frac{C_n}{(1+r)^{n}} = 0"
style='width:154.5pt;height:37.5pt'> <v:imagedata src="file:///F:\DOCUME~1\satish\LOCALS~1\Temp\msohtml1\01\clip_image003.gif"
o:href="http://upload.wikimedia.org/math/d/f/0/df0b3423bc7412d11b3871c2333fff89.png"/> </v:shape><![endif]--><!--[if !vml]--><!--[endif]--><o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">-200+31.82+66.12+67.62+51.23+12.42 = 29.3 for x<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify;"><span lang="EN" style="color: black; font-family: Arial; font-size: 10.0pt; mso-ansi-language: EN;">-200+198.18+8.26+7.51+2.73+1.86 = 18.54 for y<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-85323231799376126412011-06-20T01:59:00.002-07:002011-06-20T01:59:59.960-07:00Take a suitable example and explain the impact of cost and volume changes on the profits<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="margin-left: .5in; text-align: justify; text-indent: -.5in;"><b>Take a suitable example and explain the impact of cost and volume changes on the profits of a business.<o:p></o:p></b></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><b><span style="color: black; font-family: Arial; font-size: 10.0pt;">Solution: </span></b><span style="color: black; font-family: Arial; font-size: 10.0pt;">Cost-volume-profit (CVP) analysis expands the use of information provided by breakeven analysis. A critical part of CVP analysis is the point where total revenues equal total costs (both fixed and variable costs). At this breakeven point (BEP), a company will experience no income or loss. This BEP can be an initial examination that precedes more detailed CVP analyses. <br />
Cost-volume-profit analysis employs the same basic assumptions as in breakeven analysis. The assumptions underlying CVP analysis are: <br />
The behavior of both costs and revenues in linear throughout the relevant range of activity. (This assumption precludes the concept of volume discounts on either purchased materials or sales.) <br />
Costs can be classified accurately as either fixed or variable. <br />
Changes in activity are the only factors that affect costs. <br />
All units produced are sold (there is no ending finished goods inventory). <br />
When a company sells more than one type of product, the sales mix (the ratio of each product to total sales) will remain constant. <br />
<span style="mso-spacerun: yes;"> </span><br />
Cost-Volume-Profit Analysis, Production = Sales <br />
In the following discussion, only one product will be assumed. Finding the breakeven point is the initial step in CVP, since it is critical to know whether sales at a given level will at least cover the relevant costs. The breakeven point can be determined with a mathematical equation, using contribution margin, or from a CVP graph. Begin by observing the CVP graph in Figure 1, where the number of units produced equals the number of units sold. This figure illustrates the basic CVP case. Total revenues are zero when output is zero, but grow linearly with each unit sold. However, total costs have a positive base even at zero output, because fixed costs will be incurred even if no units are produced. Such costs may include dedicated equipment or other components of fixed costs. It is important to remember that fixed costs include costs of every kind, including fixed sales salaries, fixed office rent, and fixed equipment depreciation of all types. Variable costs also include all types of variable costs: selling, administrative, and production. Sometimes, the focus is on production to the point where it is easy to overlook that all costs must be classified as either fixed or variable, not merely product costs. <br />
Where the total revenue line intersects the total costs line, breakeven occurs. By drawing a vertical line from this point to the units of output (X) axis, one can determine the number of units to break even. A horizontal line drawn from the intersection to the dollars (Y) axis would reveal the total revenues and total costs at the breakeven point. For units sold above the breakeven point, the total revenue line continues to climb above the total cost line and the company enjoys a profit. For units sold below the breakeven point, the company suffers a loss. <br />
Illustrating the use of a mathematical equation to calculate the BEP requires the assumption of representative numbers. <br />
Assume that a company has total annual fixed cost of $480,000 and that variable costs of all kinds are found to be $6 per unit. If each unit sells for $10, then each unit exceeds the specific variable costs that it causes by $4. This $4 amount is known as the unit contribution margin. This means that each unit sold contributes $4 to cover the fixed costs. In this intuitive example, 120,000 units must be produced and sold in order to break even. To express this in a mathematical equation, consider the following abbreviated income statement: <br />
Unit Sales = Total Variable Costs + Total Fixed Costs + Net Income <br />
Inserting the assumed numbers and letting X equal the number of units to break even: <br />
$10.00X = $6.00X + $480,000 + 0 <br />
Note that net income is set at zero, the breakeven point. Solving this algebraically provides the same intuitive answer as above, and also the shortcut formula for the contribution margin technique: <br />
Fixed Costs ÷ Unit Contribution Margin = Breakeven Point in Units <br />
$480,000 ÷ $4.00 = 120,000 units <br />
If the breakeven point in sales dollars is desired, use of the contribution margin ratio is helpful. The contribution margin ratio can be calculated as follows: <br />
Unit Contribution Margin ÷ Unit Sales Price = Contribution Margin Ratio <br />
$4.00 ÷ $10.00 = 40% <br />
To determine the breakeven point in sales dollars, use the following mathematical equation: <br />
Total Fixed Costs ÷ Contribution Margin Ratio = Breakeven Point in Sales Dollars <br />
$480,000 ÷ 40% = $1,200,000 <br />
The margin of safety is the amount by which the actual level of sales exceeds the breakeven level of sales. This can be expressed in units of output or in dollars. For example, if sales are expected to be 121,000 units, the margin of safety is 1,000 units over breakeven, or $4,000 in profits before tax. <br />
A useful extension of knowing breakeven data is the prediction of target income. If a company with the cost structure described above wishes to earn a target income of $100,000 before taxes, consider the condensed income statement below. Let X = the number of units to be sold to produce the desired target income: <br />
Target Net Income = Required Sales Dollars − Variable Costs − Fixed Costs <br />
$100,000 = $10.00X − $6.00X − $480,000 <br />
Solving the above equation finds that 145,000 units must be produced and sold in order for the company to earn a target net income of $100,000 before considering the effect of income taxes. <br />
A manager must ensure that profitability is within the realm of possibility for the company, given its level of capacity. If the company has the ability to produce 100 units in an 8-hour shift, but the breakeven point for the year occurs at 120,000 units, then it appears impossible for the company to profit from this product. At best, they can produce 109,500 units, working three 8-hour shifts, 365 days per year (3 X 100 X 365). Before abandoning the product, the manager should investigate several strategies: <br />
Examine the pricing of the product. Customers may be willing to pay more than the price assumed in the CVP analysis. However, this option may not be available in a highly competitive market. <br />
If there are multiple products, then examine the allocation of fixed costs for reasonableness. If some of the assigned costs would be incurred even in the absence of this product, it may be reasonable to reconsider the product without including such costs. <br />
Variable material costs may be reduced through contractual volume purchases per year. <br />
Other variable costs (e.g., labor and utilities) may improve by changing the process. Changing the process may decrease variable costs, but increase fixed costs. For example, state-of-the-art technology may process units at a lower per-unit cost, but the fixed cost (typically, depreciation expense) can offset this advantage. Flexible analyses that explore more than one type of process are particularly useful in justifying capital budgeting decisions. Spreadsheets have long been used to facilitate such decision-making. <br />
One of the most essential assumptions of CVP is that if a unit is produced in a given year, it will be sold in that year. Unsold units distort the analysis. Figure 2 illustrates this problem, as incremental revenues cease while costs continue. The profit area is bounded, as units are stored for future sale. <br />
Unsold production is carried on the books as finished goods inventory. From a financial statement perspective, the costs of production on these units are deferred into the next year by being reclassified as assets. The risk is that these units will not be salable in the next year due to obsolescence or deterioration<br />
Cost-Volume-Profit Analysis, Production > Sales <br />
While the assumptions employ determinate estimates of costs, historical data can be used to develop appropriate probability distributions for stochastic analysis. The restaurant industry, for example, generally considers a 15 percent variation to be "accurate." <br />
APPLICATIONS <br />
While this type of analysis is typical for manufacturing firms, it also is appropriate for other types of industries. In addition to the restaurant industry, CVP has been used in decision-making for nuclear versus gas- or coal-fired energy generation. Some of the more important costs in the analysis are projected discount rates and increasing governmental regulation. At a more down-to-earth level is the prospective purchase of high quality compost for use on golf courses in the Carolinas. Greens managers tend to balk at the necessity of high (fixed) cost equipment necessary for uniform spreadability and maintenance, even if the (variable) cost of the compost is reasonable. Interestingly, one of the unacceptably high fixed costs of this compost is the smell, which is not adaptable to CVP analysis. <br />
Even in the highly regulated banking industry, CVP has been useful in pricing decisions. The market for banking services is based on two primary categories. First is the price-sensitive group. In the 1990s leading banks tended to increase fees on small, otherwise unprofitable accounts. As smaller account holders have departed, operating costs for these banks have decreased due to fewer accounts; those that remain pay for their keep. The second category is the maturity-based group. Responses to changes in rates paid for certificates of deposit are inherently delayed by the maturity date. Important increases in fixed costs for banks include computer technology and the employment of skilled analysts to segment the markets for study. <br />
Even entities without a profit goal find CVP useful. Governmental agencies use the analysis to determine the level of service appropriate for projected revenues. Nonprofit agencies, increasingly stipulating fees for service, can explore fee-pricing options; in many cases, the recipients are especially price-sensitive due to income or health concerns. The agency can use CVP to explore the options for efficient allocation of resources. <br />
Project feasibility studies frequently use CVP as a preliminary analysis. Such major undertakings as real estate/construction ventures have used this technique to explore pricing, lender choice, and project scope options. <br />
Cost-volume-profit analysis is a simple but flexible tool for exploring potential profit based on cost strategies and pricing decisions. While it may not provide detailed analysis, it can prevent "do-nothing" management paralysis by providing insight on an overview basis<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-63515794940234168432011-06-20T01:59:00.000-07:002011-06-20T01:59:06.582-07:00“Accounting is closely connected with control”. Elaborate the statement and discuss the role of accounting feedback in the process of control.<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="margin-left: .5in; text-align: justify; text-indent: -.5in;">“Accounting is closely connected with control”. Elaborate the statement and discuss the role of accounting feedback in the process of control. </div><div class="MsoNormal" style="margin-left: .5in; text-align: justify; text-indent: -.5in;"><br />
</div><div class="MsoBodyText">Solution:<span style="mso-spacerun: yes;"> </span><span style="font-weight: normal;">Controls are an integral part of any organization's financial and Accouting Process Controls consists of all the measures taken by the organization for the purpose of Internal accounting control and of<span style="mso-spacerun: yes;"> </span>procedures designed to promote and protect management practices, both general and financial. Following are the role played by accounting in the process of control.<span style="mso-spacerun: yes;"> </span><br />
<br />
Developing an Internal Accounting Control System<br />
The first step in developing an effective internal accounting control system is to identify those areas where abuses or errors are likely to occur. A Guide for Management, includes the following areas and objectives in developing an effective internal accounting control system:<br />
<br />
Cash receipts<br />
To ensure that all cash intended for the organization is received, promptly deposited, properly recorded, reconciled, and kept under adequate security.<br />
<br />
Cash disbursements<br />
To ensure that cash is disbursed only upon proper authorization of management, for valid business purposes, and that all disbursements are properly recorded.<br />
<br />
Petty cash<br />
To ensure that petty cash and other working funds are disbursed only for proper purposes, are adequately safeguarded, and properly recorded.<br />
<br />
Payroll<br />
To ensure that payroll disbursements are made only upon proper authorization to bona fide employees, that payroll disbursements are properly recorded and that related legal requirements (such as payroll tax deposits) are complied with.<br />
<br />
Grants, gifts, and bequests<br />
To ensure that all grants, gifts, and bequests are received and properly recorded, and that compliance with the terms of any related restrictions is adequately monitored.<br />
<br />
Fixed assets<br />
To ensure that fixed assets are acquired and disposed of only upon proper authorization, are adequately safeguarded, and properly recorded. <br />
<br />
<br />
Additional internal controls are also required to ensure proper recording of SALES and other revenues, accurate, timely financial reports and information returns, and compliance with other government regulations.<br />
<br />
Achieving these objectives requires your organization to clearly state procedures for handling each area, including a system of checks and balances in which no financial transaction is handled by only one person from beginning to end. This principle, called segregation of duties, is central to an effective internal controls system. Even in a small nonprofit, duties can be divided up between paid staff and volunteers to reduce the opportunity for error and wrongdoing. For example, in a small organization, the director might approve payments and sign checks prepared by the bookkeeper or office manager. The board treasurer might then review disbursements with accompanying documentation each month, prepare the bank reconciliation, and review canceled checks.The board and executive director share the responsibility for setting a tone and standard of accountability and conscientiousness regarding the organization's assets and responsibilities. The board, usually through the work of the finance committee, fulfills that responsibility in part by approving many aspects of the internal control accounting system. Common areas requiring board attention include:<br style="mso-special-character: line-break;" /> <!--[if !supportLineBreakNewLine]--><br style="mso-special-character: line-break;" /> <!--[endif]--><o:p></o:p></span></div><div class="MsoBodyText"><span style="font-weight: normal;">Check issuance<br />
The number of signatures on checks, dollar amounts which require board approval or board signature on the check, who authorizes payments and financial commitments, etc.<br />
<br />
Deposits<br />
How payments made in cash (for admissions, raffles, weekly collection plate, etc.) will be handled, etc.<br />
<br />
Transfers<br />
If and when the general fund can borrow from restricted funds, etc.<br />
<br />
Approval of plans and commitments before they are implemented<br />
The annual budget and periodic comparisons of financial statements with budgeted amounts, leases, loan agreements, and other major commitments.<br />
<br />
Personnel policies<br />
Salary levels, vacation, overtime, compensatory time, benefits, grievance procedures, severance pay, evaluation, and other personnel matters. <br />
<br />
<br />
The Accounting Procedures Manual<br />
The policies and procedures for handling financial transactions are best recorded in an Accounting Procedures Manual, describing the administrative tasks and who is responsible for each. The manual does not have to be a formal document, but rather a simple description of how functions such as paying bills, depositing cash, and transferring money between funds are handled. As you start to document these procedures, even in simple memo form, the memos themselves can be kept together to form a very basic Accounting Procedures Manual. Writing or revising an Accounting Procedures Manual is a good opportunity to see whether adequate controls are in place. In addition, having such a manual facilitates smooth turnover in financial staff.<br />
<br />
Maintaining Effective Controls<br />
The FINANCE/ACCOUNTING director is commonly responsible for overseeing the day-to-day implementation of these policies and procedures. <br />
<br />
The auditor's management letter is an important indicator of the adequacy of your internal accounting control structure, and the degree to which it is maintained. The management letter, which accompanies the audit and is typically addressed to the board as trustees for the organization, cites significant weaknesses in the system or its execution. By reviewing the management letter with the executive director, asking for responses to each internal control lapse or recommendation, and comparing management letters from year to year, the board has a useful mechanism for monitoring its financial safeguards and adherence to financial policies.<br />
<br />
As your profit changes and matures, and your funding and programs change, you will need to periodically review the internal accounting control system which you have established and modify it to include new circumstances (bigger staff, more restricted funding, etc.) and regulations (such as receiving federal awards with increased compliance demands.)<br />
<br />
Internal Controls Simplified ACCOUNTING INFORMATIONS USED AS CONTROLS: CASH<br />
-Control Cash Drawers And Credit Cards <br />
-Control Cash Receipts And Deposits <br />
-control system to Manage Problem Checks <br />
-control system to Manage Wire Transfers <br />
-Control to Cheque Signing Authority <br />
-control system to Manage Check Requests <br />
-control system to Manage Bank Account Reconciliations <br />
-control system to Manage Petty Cash <br />
<br />
GENERAL & ADMINISTRATIVE<br />
-control system Manage Chart of Accounts <br />
-system to Control Files And Records Management <br />
-control system to Manage Travel And Entertainment <br />
-system to Control Management Reports <br />
-system to Control Period-End Review & Closing <br />
-control system to Manage Controlling Legal Costs <br />
-control system to Manage Taxes And Insurance <br />
-system to Control Property Tax Assessments <br />
-control system to Manage Confidential Information Release <br />
-system to Control Documents <br style="mso-special-character: line-break;" /> <!--[if !supportLineBreakNewLine]--><br style="mso-special-character: line-break;" /> <!--[endif]--><o:p></o:p></span></div><div class="MsoBodyText"><span style="font-weight: normal;">Accounting Forms applied to the CONTROL SYSTEMS.<br />
-Sample Account Codes <br />
-Account Collection Control Form <br />
-Accounts Receivable Write-Off Authorization <br />
-Asset Disposition Form <br />
-Bad Check Notice <br />
-Bank Wire Instructions <br />
-Bill Of Sale <br />
-Budget vs. Actual Report <br />
-Capital Asset Requisition <br />
-Check Request <br />
-Check Signing Authority Log <br />
-Commercial Invoice <br />
-Credit Application <br />
-Credit Inquiry <br />
-Daily Cash Report <br />
-Daily Flash Report <br />
-Daily Sundry Payable Log <br />
-Department Reporting Summary <br />
-Deposit Log <br />
-Document Change Control <br />
-Entertainment And Business Gift Expense Report <br />
-Financial Statements <br />
-Inventory Count Sheet <br />
-Inventory Inspection Levels <br />
-Inventory Requisition <br />
-Inventory Tag <br />
-Sample Invoice <br />
-Master File Guide Index <br />
-Material Return Notice <br />
-New Vendor Notification <br />
-Non-Disclosure Agreement <br />
-Order And Arrival Log <br />
-Order Form <br />
-Phone Confirmation Checklist <br />
-Purchase Order <br />
-Purchase Order Follow-Up <br />
-Purchase Order Log <br />
-Purchase Requisition <br />
-Receiving and Inspection Report <br />
-Receiving Log <br />
-Records Retention Periods <br />
-Request For Credit Approval <br />
-Request For Document Change <br />
-Returned Goods Authorization <br />
-Sample Sales Order <br />
-Sample Bank And Book Balances Reconciliation <br />
-Shipping Log <br />
-Tax Calendar of Recurring Monthly Dates <br />
-Travel And Miscellaneous Expense Report <br />
-Travel Arrangements Form <br />
-Vendor Survey Form <br />
-Week Cash Flow Report <br />
-Weekly Financial Report <br />
-Wire Transfer Form<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-9873995636209659632011-06-20T01:58:00.000-07:002011-06-20T01:58:07.965-07:00What are the different factors that a finance manager needs to consider while taking decisions regarding his/her firm’s capital structure. Explain each of these factors in detail.<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 47.0pt; margin-right: 4.3pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 47.0pt; text-autospace: none; text-indent: -.5in;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">What<span style="letter-spacing: -.05pt;"> </span>are<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>different<span style="letter-spacing: -.05pt;"> </span>factors<span style="letter-spacing: -.05pt;"> </span>that a<span style="letter-spacing: -.05pt;"> </span>finance manager<span style="letter-spacing: -.05pt;"> </span>needs to consider<span style="letter-spacing: .3pt;"> </span>while taking<span style="letter-spacing: 1.2pt;"> </span>decisions<span style="letter-spacing: 1.6pt;"> </span>regarding<span style="letter-spacing: 1.7pt;"> </span>his/her<span style="letter-spacing: 1.25pt;"> </span>firm’s<span style="letter-spacing: 1.15pt;"> </span>capital<span style="letter-spacing: 1.25pt;"> </span>structure.<span style="letter-spacing: 1.7pt;"> </span>Explain<span style="letter-spacing: 1.4pt;"> </span>each<span style="letter-spacing: .9pt;"> </span><span style="mso-font-width: 103%;">of</span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 326.2pt; margin-top: .35pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">these<span style="letter-spacing: -.35pt;"> </span>factors<span style="letter-spacing: -.35pt;"> </span>in<span style="letter-spacing: -.35pt;"> </span>detail.</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 5.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .35pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.05pt; margin-top: 1.5pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Capital<span style="letter-spacing: -.05pt;"> </span>structure<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>a<span style="letter-spacing: -.05pt;"> </span>company </span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">refers<span style="letter-spacing: .1pt;"> </span>to<span style="letter-spacing: .1pt;"> </span>the<span style="letter-spacing: .1pt;"> </span>composition<span style="letter-spacing: .1pt;"> </span>of<span style="letter-spacing: .1pt;"> </span>long<span style="letter-spacing: .5pt;">-</span>term<span style="letter-spacing: .25pt;"> </span>sources<span style="letter-spacing: .4pt;"> </span>of<span style="letter-spacing: .15pt;"> </span><span style="mso-font-width: 101%;">funds, </span><span style="letter-spacing: .45pt;">suc</span>h<span style="letter-spacing: -.6pt;"> </span><span style="letter-spacing: .45pt;">as</span><span style="letter-spacing: .5pt;">-</span>ordinary<span style="letter-spacing: 1.95pt;"> </span>shares,<span style="letter-spacing: 1.8pt;"> </span>preference<span style="letter-spacing: 2.15pt;"> </span>shares,<span style="letter-spacing: 1.8pt;"> </span>debentures,<span style="letter-spacing: 2.25pt;"> </span>b<span style="letter-spacing: -.15pt;">o</span><span style="letter-spacing: .35pt;">nds</span>,<span style="letter-spacing: -.55pt;"> </span><span style="letter-spacing: .35pt;">long</span><span style="letter-spacing: .5pt;">-</span>term<span style="letter-spacing: 2.45pt;"> </span>debts<span style="letter-spacing: 2.5pt;"> </span>etc.<span style="letter-spacing: 2.4pt;"> </span>In other<span style="letter-spacing: .4pt;"> </span>words,<span style="letter-spacing: .4pt;"> </span>it<span style="letter-spacing: .4pt;"> </span>refers<span style="letter-spacing: .4pt;"> </span>to<span style="letter-spacing: .4pt;"> </span>the<span style="letter-spacing: .4pt;"> </span>kind<span style="letter-spacing: .4pt;"> </span>and<span style="letter-spacing: .4pt;"> </span>proportion<span style="letter-spacing: .4pt;"> </span>of<span style="letter-spacing: .4pt;"> </span>securities<span style="letter-spacing: .4pt;"> </span>for<span style="letter-spacing: .4pt;"> </span>raising<span style="letter-spacing: .4pt;"> </span>lon<span style="letter-spacing: .05pt;">g</span><span style="letter-spacing: .5pt;">-</span>term<span style="letter-spacing: 1.25pt;"> </span>funds. It<span style="letter-spacing: 1.65pt;"> </span>implies<span style="letter-spacing: 2.2pt;"> </span>the<span style="letter-spacing: 1.8pt;"> </span>determination<span style="letter-spacing: 2.85pt;"> </span>of<span style="letter-spacing: 1.7pt;"> </span>form<span style="letter-spacing: 1.95pt;"> </span>or<span style="letter-spacing: 1.7pt;"> </span><span style="mso-font-width: 102%;">mak<span style="letter-spacing: -.2pt;">e</span></span>-<span style="letter-spacing: -1.75pt;"> </span>up<span style="letter-spacing: 1.7pt;"> </span>of<span style="letter-spacing: 1.7pt;"> </span>a<span style="letter-spacing: 1.7pt;"> </span>company's<span style="letter-spacing: 2.6pt;"> </span>capitalisation.<span style="letter-spacing: 2.95pt;"> </span><span style="mso-font-width: 102%;">Some </span>authors<span style="letter-spacing: .4pt;"> </span>use capitalisation<span style="letter-spacing: .95pt;"> </span>and<span style="letter-spacing: .05pt;"> </span>capital<span style="letter-spacing: .3pt;"> </span>structure<span style="letter-spacing: .5pt;"> </span><span style="letter-spacing: -.05pt;">i</span>nterchangeably.<span style="letter-spacing: .85pt;"> </span>However,<span style="letter-spacing: .8pt;"> </span>capitalisation merely refers to the determination of the amount of capital needed for successful business operations, whereas capital structure is concerned with the determination of proportion of different<span style="letter-spacing: .3pt;"> </span>sources<span style="letter-spacing: .25pt;"> </span>of long<span style="letter-spacing: .5pt;">-</span>term<span style="letter-spacing: .35pt;"> </span>funds<span style="letter-spacing: .25pt;"> </span>in<span style="letter-spacing: .25pt;"> </span>the<span style="letter-spacing: .5pt;"> </span>capitalisation<span style="letter-spacing: 1.95pt;"> </span>of<span style="letter-spacing: .25pt;"> </span>a<span style="letter-spacing: .2pt;"> </span>company.<span style="letter-spacing: 1.0pt;"> </span>It<span style="letter-spacing: .25pt;"> </span>is,<span style="letter-spacing: .25pt;"> </span><span style="mso-font-width: 102%;">therefore, </span>evident <span style="letter-spacing: .85pt;"><span style="mso-spacerun: yes;"> </span></span>that <span style="letter-spacing: .15pt;"><span style="mso-spacerun: yes;"> </span></span>`capitalisation' <span style="letter-spacing: 2.2pt;"><span style="mso-spacerun: yes;"> </span></span>and <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>`capital <span style="letter-spacing: .85pt;"><span style="mso-spacerun: yes;"> </span></span>structure' <span style="letter-spacing: 1.2pt;"><span style="mso-spacerun: yes;"> </span></span>are<span style="mso-spacerun: yes;"> </span>the<span style="mso-spacerun: yes;"> </span>two <span style="letter-spacing: .15pt;"><span style="mso-spacerun: yes;"> </span></span>different <span style="letter-spacing: 1.05pt;"><span style="mso-spacerun: yes;"> </span></span>aspects <span style="letter-spacing: .8pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 104%;">of </span>financial<span style="letter-spacing: -.75pt;"> </span>planning.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 129.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">The<span style="letter-spacing: -.05pt;"> </span>following<span style="letter-spacing: -.05pt;"> </span>factors<span style="letter-spacing: -.05pt;"> </span>govern<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>capital<span style="letter-spacing: -.05pt;"> </span>structure<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>a<span style="letter-spacing: -.05pt;"> </span>company:<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.45pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .1pt;">(1</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">)<span style="mso-tab-count: 1;"> </span>Trading<span style="letter-spacing: 1.8pt;"> </span>on<span style="letter-spacing: 1.4pt;"> </span>Equity.<span style="letter-spacing: .4pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">A<span style="letter-spacing: 1.05pt;"> </span>Company<span style="letter-spacing: 1.35pt;"> </span>earns<span style="letter-spacing: .9pt;"> </span>the<span style="letter-spacing: .85pt;"> </span>profits<span style="letter-spacing: 1.05pt;"> </span>on<span style="letter-spacing: .65pt;"> </span>its<span style="letter-spacing: .75pt;"> </span>total<span style="letter-spacing: 1.05pt;"> </span>capital<span style="letter-spacing: 1.35pt;"> </span><span style="mso-font-width: 102%;">(borrowed</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.0pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">and<span style="mso-spacerun: yes;"> </span>owned). <span style="letter-spacing: .85pt;"><span style="mso-spacerun: yes;"> </span></span>On<span style="letter-spacing: 2.9pt;"> </span>the<span style="letter-spacing: 2.9pt;"> </span>borrowed <span style="letter-spacing: 1.15pt;"><span style="mso-spacerun: yes;"> </span></span>capital <span style="letter-spacing: .6pt;"><span style="mso-spacerun: yes;"> </span></span>(including <span style="letter-spacing: 1.3pt;"><span style="mso-spacerun: yes;"> </span></span>preference <span style="letter-spacing: 1.35pt;"><span style="mso-spacerun: yes;"> </span></span>capital) <span style="letter-spacing: .75pt;"><span style="mso-spacerun: yes;"> </span></span>company <span style="letter-spacing: 1.05pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 104%;">pays </span>interest<span style="letter-spacing: 1.2pt;"> </span>or<span style="letter-spacing: .2pt;"> </span>dividend<span style="letter-spacing: 1.45pt;"> </span>at<span style="letter-spacing: .15pt;"> </span>a fixed<span style="letter-spacing: .75pt;"> </span>rate.<span style="letter-spacing: .65pt;"> </span>If<span style="letter-spacing: .1pt;"> </span>this<span style="letter-spacing: .5pt;"> </span>fixed<span style="letter-spacing: .75pt;"> </span>rate<span style="letter-spacing: .5pt;"> </span>is<span style="letter-spacing: .1pt;"> </span>lower<span style="letter-spacing: .9pt;"> </span>than<span style="letter-spacing: .6pt;"> </span>the<span style="letter-spacing: .35pt;"> </span>general<span style="letter-spacing: 1.2pt;"> </span>rate<span style="letter-spacing: .5pt;"> </span><span style="mso-font-width: 104%;">of </span>earnings of the company, the<span style="letter-spacing: .15pt;"> </span>ordinary<span style="letter-spacing: .2pt;"> </span>shareholders<span style="letter-spacing: .2pt;"> </span>will<span style="letter-spacing: .2pt;"> </span>have<span style="letter-spacing: .2pt;"> </span>an<span style="letter-spacing: .2pt;"> </span>advantage<span style="letter-spacing: .2pt;"> </span>in<span style="letter-spacing: .2pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>form<span style="letter-spacing: .2pt;"> </span>of additional profits. This may be referred to as trading on equity. This `trading on equity' is an<span style="letter-spacing: .2pt;"> </span>arrangement<span style="letter-spacing: 1.65pt;"> </span>under<span style="letter-spacing: .65pt;"> </span>which<span style="letter-spacing: .7pt;"> </span>a company<span style="letter-spacing: 1.15pt;"> </span>makes<span style="letter-spacing: .75pt;"> </span>use<span style="letter-spacing: .3pt;"> </span>of<span style="letter-spacing: .15pt;"> </span>borrowed<span style="letter-spacing: 1.2pt;"> </span>funds<span style="letter-spacing: .65pt;"> </span><span style="mso-font-width: 103%;">including </span>preference<span style="letter-spacing: -.05pt;"> </span>capital<span style="letter-spacing: -.05pt;"> </span>bearing<span style="letter-spacing: .4pt;"> </span>a<span style="letter-spacing: .4pt;"> </span>fixed<span style="letter-spacing: .4pt;"> </span>rate<span style="letter-spacing: .4pt;"> </span>of<span style="letter-spacing: .4pt;"> </span>interest<span style="letter-spacing: .4pt;"> </span>or<span style="letter-spacing: .4pt;"> </span>dividend<span style="letter-spacing: .4pt;"> </span>in<span style="letter-spacing: .4pt;"> </span>such<span style="letter-spacing: .4pt;"> </span>a<span style="letter-spacing: .4pt;"> </span>way<span style="letter-spacing: .4pt;"> </span>as<span style="letter-spacing: .4pt;"> </span>to<span style="letter-spacing: .4pt;"> </span>increase the<span style="letter-spacing: 1.9pt;"> </span>rate<span style="letter-spacing: 2.05pt;"> </span>of<span style="letter-spacing: 1.7pt;"> </span>return<span style="letter-spacing: 2.45pt;"> </span>on<span style="letter-spacing: 1.8pt;"> </span>equity<span style="letter-spacing: 2.5pt;"> </span>shares.<span style="letter-spacing: 2.65pt;"> </span>The<span style="letter-spacing: 2.05pt;"> </span>rate<span style="letter-spacing: 2.05pt;"> </span>of<span style="letter-spacing: 1.7pt;"> </span>dividend<span style="mso-spacerun: yes;"> </span>on<span style="letter-spacing: 1.8pt;"> </span>equity<span style="letter-spacing: 2.5pt;"> </span>shares<span style="letter-spacing: 2.5pt;"> </span>could<span style="letter-spacing: 2.4pt;"> </span><span style="mso-font-width: 104%;">not, </span>otherwise<span style="letter-spacing: 2.3pt;"> </span>go<span style="letter-spacing: .95pt;"> </span>beyond<span style="letter-spacing: 1.85pt;"> </span>the<span style="letter-spacing: 1.05pt;"> </span>general<span style="letter-spacing: 1.85pt;"> </span>rate<span style="letter-spacing: 1.15pt;"> </span>of<span style="letter-spacing: .85pt;"> </span>earning<span style="letter-spacing: 1.9pt;"> </span>if<span style="letter-spacing: .75pt;"> </span>whole<span style="letter-spacing: 1.6pt;"> </span>of<span style="letter-spacing: .85pt;"> </span>its<span style="letter-spacing: .9pt;"> </span>capital<span style="letter-spacing: 1.75pt;"> </span>is<span style="letter-spacing: .75pt;"> </span>raised<span style="letter-spacing: 1.6pt;"> </span>by<span style="letter-spacing: .95pt;"> </span><span style="mso-font-width: 104%;">the </span>issue of equity<span style="letter-spacing: .45pt;"> </span>shares,<span style="letter-spacing: .45pt;"> </span>shares<span style="letter-spacing: .45pt;"> </span>bearing<span style="letter-spacing: .45pt;"> </span>a<span style="letter-spacing: .45pt;"> </span>rate<span style="letter-spacing: .45pt;"> </span>of<span style="letter-spacing: .45pt;"> </span>interest/dividend<span style="letter-spacing: .45pt;"> </span>below<span style="letter-spacing: .45pt;"> </span>the<span style="letter-spacing: .45pt;"> </span>general<span style="letter-spacing: .45pt;"> </span>rate<span style="letter-spacing: .45pt;"> </span>of return. Company will also have an advantage in the saving of income tax as interest paid on debentures is a deductible expense. This double advantage tempts the management to trade<span style="letter-spacing: -.7pt;"> </span>on<span style="letter-spacing: -.1pt;"> </span>equity.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.8pt; margin-top: .5pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .1pt; line-height: 99%;">(2</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">)<span style="mso-tab-count: 1;"> </span>Desire<span style="letter-spacing: 2.2pt;"> </span>to<span style="letter-spacing: 1.95pt;"> </span>Control<span style="letter-spacing: 2.25pt;"> </span>the<span style="letter-spacing: 2.0pt;"> </span>Business.<span style="letter-spacing: .4pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Quite<span style="letter-spacing: 1.8pt;"> </span>often,<span style="letter-spacing: 1.8pt;"> </span>the<span style="letter-spacing: 1.55pt;"> </span>promoters<span style="letter-spacing: 2.2pt;"> </span>want<span style="letter-spacing: 1.7pt;"> </span>to<span style="letter-spacing: 1.45pt;"> </span>retain<span style="letter-spacing: 1.8pt;"> </span><span style="mso-font-width: 102%;">the </span>control<span style="letter-spacing: .95pt;"> </span>of the<span style="letter-spacing: .2pt;"> </span>affairs<span style="letter-spacing: .8pt;"> </span>of the<span style="letter-spacing: .2pt;"> </span>company.<span style="letter-spacing: 1.5pt;"> </span>They<span style="letter-spacing: .6pt;"> </span>raise<span style="letter-spacing: .5pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>capital<span style="letter-spacing: .9pt;"> </span>from<span style="letter-spacing: .55pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>public<span style="letter-spacing: .8pt;"> </span>by<span style="letter-spacing: .1pt;"> </span><span style="mso-font-width: 104%;">issuing </span>different types of securities is such a way as to retain the control of<span style="letter-spacing: .25pt;"> </span>whole<span style="letter-spacing: .25pt;"> </span>or<span style="letter-spacing: .25pt;"> </span>substantially the<span style="letter-spacing: .35pt;"> </span>whole<span style="letter-spacing: .95pt;"> </span>of<span style="letter-spacing: .2pt;"> </span>the<span style="letter-spacing: .35pt;"> </span>affairs<span style="letter-spacing: 1.0pt;"> </span>of<span style="letter-spacing: .2pt;"> </span>the<span style="letter-spacing: .35pt;"> </span>company<span style="letter-spacing: 1.55pt;"> </span>with<span style="letter-spacing: .65pt;"> </span>them.<span style="letter-spacing: .85pt;"> </span>For<span style="letter-spacing: .45pt;"> </span>this<span style="letter-spacing: .5pt;"> </span>purpose,<span style="letter-spacing: 1.45pt;"> </span>they<span style="letter-spacing: .6pt;"> </span>raise<span style="letter-spacing: .7pt;"> </span>a <span style="mso-font-width: 104%;">large </span>proportion of funds by the issue of debentures and preference shares. Debentureholders and<span style="letter-spacing: 1.65pt;"> </span>preference<span style="letter-spacing: 2.3pt;"> </span>shareholders<span style="letter-spacing: 2.5pt;"> </span>are<span style="letter-spacing: 1.6pt;"> </span>usually<span style="letter-spacing: 2.0pt;"> </span>not<span style="letter-spacing: 1.6pt;"> </span>given<span style="letter-spacing: 1.85pt;"> </span>any<span style="letter-spacing: 1.65pt;"> </span>v<span style="letter-spacing: -.3pt;">o</span>ting<span style="letter-spacing: 2.45pt;"> </span>right<span style="letter-spacing: 2.25pt;"> </span>as<span style="letter-spacing: 2.1pt;"> </span>enjoyed<span style="letter-spacing: 2.4pt;"> </span>by<span style="letter-spacing: 2.1pt;"> </span><span style="mso-font-width: 101%;">the </span>equity <span style="letter-spacing: .85pt;"><span style="mso-spacerun: yes;"> </span></span>shareholders. <span style="letter-spacing: 2.2pt;"><span style="mso-spacerun: yes;"> </span></span>A<span style="mso-spacerun: yes;"> </span>majority <span style="letter-spacing: 1.3pt;"><span style="mso-spacerun: yes;"> </span></span>of <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>equity <span style="letter-spacing: .85pt;"><span style="mso-spacerun: yes;"> </span></span>share <span style="letter-spacing: .65pt;"><span style="mso-spacerun: yes;"> </span></span>capital <span style="letter-spacing: .95pt;"><span style="mso-spacerun: yes;"> </span></span>is, <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>therefore, <span style="letter-spacing: 1.5pt;"><span style="mso-spacerun: yes;"> </span></span>held <span style="letter-spacing: .5pt;"><span style="mso-spacerun: yes;"> </span></span>by <span style="letter-spacing: .15pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 104%;">the </span>promoters<span style="letter-spacing: .85pt;"> </span>and<span style="letter-spacing: .5pt;"> </span>their<span style="letter-spacing: .55pt;"> </span>near<span style="letter-spacing: .5pt;">-</span>relatives<span style="letter-spacing: 1.25pt;"> </span>as<span style="letter-spacing: 1.05pt;"> </span>only<span style="letter-spacing: 1.05pt;"> </span>the<span style="letter-spacing: 1.05pt;"> </span>equity<span style="letter-spacing: 1.05pt;"> </span>shareholders<span style="letter-spacing: 1.05pt;"> </span>enjoy<span style="letter-spacing: 1.05pt;"> </span>the<span style="letter-spacing: 1.05pt;"> </span>voting<span style="letter-spacing: 1.05pt;"> </span>right in<span style="letter-spacing: .65pt;"> </span>the<span style="letter-spacing: .65pt;"> </span>conduct<span style="letter-spacing: .65pt;"> </span>of<span style="letter-spacing: .65pt;"> </span>the<span style="letter-spacing: .65pt;"> </span>affairs<span style="letter-spacing: .65pt;"> </span>of<span style="letter-spacing: .65pt;"> </span>the<span style="letter-spacing: .65pt;"> </span>company.<span style="letter-spacing: .65pt;"> </span>Thus,<span style="letter-spacing: .65pt;"> </span>the<span style="letter-spacing: .3pt;"> </span>company<span style="letter-spacing: .7pt;"> </span>collects<span style="letter-spacing: .6pt;"> </span>its<span style="letter-spacing: .35pt;"> </span><span style="mso-font-width: 101%;">requirement </span>of<span style="letter-spacing: -.05pt;"> </span>funds<span style="letter-spacing: -.1pt;"> </span>from<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>public,<span style="letter-spacing: -.1pt;"> </span>though<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>control<span style="letter-spacing: -.1pt;"> </span>rests<span style="letter-spacing: -.1pt;"> </span>with<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>promoters.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.35pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">(3)<span style="letter-spacing: 1.3pt;"> </span>Nature<span style="letter-spacing: 1.5pt;"> </span>of<span style="letter-spacing: 1.25pt;"> </span>Business.<span style="letter-spacing: .45pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Nature<span style="letter-spacing: .95pt;"> </span>of<span style="letter-spacing: .95pt;"> </span>business<span style="letter-spacing: .95pt;"> </span>must<span style="letter-spacing: .95pt;"> </span>be<span style="letter-spacing: .95pt;"> </span>taken<span style="letter-spacing: .95pt;"> </span>into<span style="letter-spacing: .95pt;"> </span>account<span style="letter-spacing: .95pt;"> </span>while<span style="letter-spacing: .95pt;"> </span>designing the<span style="letter-spacing: 2.8pt;"> </span>financial <span style="letter-spacing: .65pt;"><span style="mso-spacerun: yes;"> </span></span>plan<span style="mso-spacerun: yes;"> </span>and<span style="letter-spacing: 2.9pt;"> </span>n<span style="letter-spacing: 2.55pt;"> </span>have <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>a<span style="letter-spacing: 2.55pt;"> </span>determining <span style="letter-spacing: 1.1pt;"><span style="mso-spacerun: yes;"> </span></span>the<span style="letter-spacing: 2.8pt;"> </span>capital <span style="letter-spacing: .35pt;"><span style="mso-spacerun: yes;"> </span></span>structu<span style="letter-spacing: -.75pt;">r</span>e. <span style="letter-spacing: 1.45pt;"><span style="mso-spacerun: yes;"> </span></span>A <span style="letter-spacing: .3pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 101%;">manufacturing </span>company<span style="letter-spacing: 1.35pt;"> </span>may<span style="letter-spacing: .4pt;"> </span>structure<span style="letter-spacing: 1.3pt;"> </span>from<span style="letter-spacing: .55pt;"> </span>merchantising,<span style="letter-spacing: 2.45pt;"> </span>financing,<span style="letter-spacing: 1.55pt;"> </span>extractive<span style="letter-spacing: 1.5pt;"> </span>or public<span style="letter-spacing: .8pt;"> </span><span style="mso-font-width: 104%;">utility </span>concerns. These enterprises differ in regard to the amount of investment, risk of failures involved, trade cycles and freedom from competition. These, differences<span style="letter-spacing: .5pt;"> </span>enable<span style="letter-spacing: .45pt;"> </span>one<span style="letter-spacing: .3pt;"> </span><span style="mso-font-width: 101%;">type </span>of business issue securities which are not profitable to other business. So, public utility concern <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>may<span style="letter-spacing: 2.4pt;"> </span>enjoy<span style="letter-spacing: 2.65pt;"> </span>advantages <span style="letter-spacing: .7pt;"><span style="mso-spacerun: yes;"> </span></span>of<span style="letter-spacing: 2.0pt;"> </span>fixed<span style="letter-spacing: 2.55pt;"> </span>interest<span style="mso-spacerun: yes;"> </span>securities <span style="letter-spacing: .4pt;"><span style="mso-spacerun: yes;"> </span></span>like<span style="letter-spacing: 2.3pt;"> </span>bonds<span style="letter-spacing: 2.75pt;"> </span>and<span style="letter-spacing: 2.3pt;"> </span><span style="mso-font-width: 104%;">debenture </span>because of their monopoly and stability of income. But, <span style="letter-spacing: -.05pt;">o</span>n<span style="letter-spacing: .25pt;"> </span>the<span style="letter-spacing: .25pt;"> </span>other<span style="letter-spacing: .25pt;"> </span>hand,<span style="letter-spacing: .25pt;"> </span>manufacturing concerns<span style="letter-spacing: -.05pt;"> </span>do<span style="letter-spacing: -.05pt;"> </span>not<span style="letter-spacing: -.05pt;"> </span>enjoy<span style="letter-spacing: -.05pt;"> </span>such<span style="letter-spacing: -.05pt;"> </span>advantages<span style="letter-spacing: -.05pt;"> </span>and<span style="letter-spacing: -.05pt;"> </span>rely<span style="letter-spacing: -.05pt;"> </span>to<span style="letter-spacing: -.05pt;"> </span>a<span style="letter-spacing: -.05pt;"> </span>great<span style="letter-spacing: -.05pt;"> </span>extent<span style="letter-spacing: -.05pt;"> </span>on<span style="letter-spacing: -.05pt;"> </span>equity<span style="letter-spacing: -.05pt;"> </span>share<span style="letter-spacing: -.05pt;"> </span>cap<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.9pt; margin-top: 1.5pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">(4)<span style="letter-spacing: .25pt;"> </span>Purpose<span style="letter-spacing: .55pt;"> </span>of<span style="letter-spacing: .2pt;"> </span>Financing.<span style="letter-spacing: .05pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">The<span style="letter-spacing: .3pt;"> </span>purpose<span style="letter-spacing: .5pt;"> </span>for which<span style="letter-spacing: .6pt;"> </span>funds<span style="letter-spacing: .25pt;"> </span>are<span style="letter-spacing: .15pt;"> </span>being<span style="letter-spacing: .5pt;"> </span>raised<span style="letter-spacing: .6pt;"> </span>must<span style="letter-spacing: .4pt;"> </span>be<span style="letter-spacing: .05pt;"> </span><span style="mso-font-width: 103%;">taken </span>into<span style="letter-spacing: .7pt;"> </span>account<span style="letter-spacing: .7pt;"> </span>at<span style="letter-spacing: .7pt;"> </span>the<span style="letter-spacing: .7pt;"> </span>time<span style="letter-spacing: .7pt;"> </span>of<span style="letter-spacing: .7pt;"> </span>devising<span style="letter-spacing: .7pt;"> </span>financial<span style="letter-spacing: .7pt;"> </span>structure<span style="letter-spacing: .6pt;"> </span>of<span style="letter-spacing: .6pt;"> </span>a<span style="letter-spacing: .6pt;"> </span>company.<span style="letter-spacing: .95pt;"> </span>If<span style="letter-spacing: .6pt;"> </span>funds<span style="letter-spacing: .75pt;"> </span>are<span style="letter-spacing: .8pt;"> </span><span style="mso-font-width: 101%;">raised </span>for<span style="letter-spacing: 1.2pt;"> </span>betterment<span style="letter-spacing: 2.65pt;"> </span>expenditure,<span style="mso-spacerun: yes;"> </span>it<span style="letter-spacing: .9pt;"> </span>is<span style="letter-spacing: .95pt;"> </span>quite<span style="letter-spacing: 1.55pt;"> </span>apparent<span style="letter-spacing: 2.25pt;"> </span>that<span style="letter-spacing: 1.35pt;"> </span>it<span style="letter-spacing: .9pt;"> </span>will<span style="letter-spacing: 1.35pt;"> </span>add<span style="letter-spacing: 1.3pt;"> </span>nothing<span style="letter-spacing: 2.1pt;"> </span>to<span style="letter-spacing: 1.0pt;"> </span>the<span style="letter-spacing: 1.2pt;"> </span><span style="mso-font-width: 104%;">earning </span>capacity of the company. Such expenditure may be incurred either out f funds raised by issue<span style="letter-spacing: .4pt;"> </span>of<span style="letter-spacing: .1pt;"> </span>shares<span style="letter-spacing: .5pt;"> </span>or<span style="letter-spacing: .1pt;"> </span>still<span style="letter-spacing: .25pt;"> </span>better<span style="letter-spacing: .45pt;"> </span>out<span style="letter-spacing: .2pt;"> </span>of<span style="letter-spacing: .1pt;"> </span>ret<span style="letter-spacing: -.2pt;">a</span>ined<span style="letter-spacing: .6pt;"> </span>earnings<span style="letter-spacing: .65pt;"> </span>but,<span style="letter-spacing: .2pt;"> </span>in no<span style="letter-spacing: .05pt;"> </span>case,<span style="letter-spacing: .3pt;"> </span>out<span style="letter-spacing: .1pt;"> </span>of <span style="mso-font-width: 102%;">borrowed </span>funds.<span style="letter-spacing: .8pt;"> </span>On<span style="letter-spacing: .2pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>other<span style="letter-spacing: .6pt;"> </span>hand<span style="letter-spacing: .55pt;"> </span>productive<span style="letter-spacing: 1.65pt;"> </span>projects<span style="letter-spacing: 1.1pt;"> </span>may<span style="letter-spacing: .4pt;"> </span>be<span style="letter-spacing: .05pt;"> </span>financed<span style="letter-spacing: 1.25pt;"> </span>out<span style="letter-spacing: .2pt;"> </span>of borrowings<span style="letter-spacing: 1.8pt;"> </span><span style="mso-font-width: 104%;">also. </span>Borrowings should never be used to meet out losses unless they are caused by paucity of funds.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.25pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(5)<span style="letter-spacing: .1pt;"> </span>Period<span style="letter-spacing: .1pt;"> </span>of<span style="letter-spacing: .1pt;"> </span>Finance. </span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Normally<span style="letter-spacing: -.6pt;"> </span>funds<span style="letter-spacing: .15pt;"> </span>which<span style="letter-spacing: .15pt;"> </span>are<span style="letter-spacing: .15pt;"> </span>required<span style="letter-spacing: .15pt;"> </span>for<span style="letter-spacing: .15pt;"> </span>a<span style="letter-spacing: .15pt;"> </span>short<span style="letter-spacing: .15pt;"> </span>time<span style="letter-spacing: .15pt;"> </span>say<span style="letter-spacing: .15pt;"> </span>for<span style="letter-spacing: .15pt;"> </span>5<span style="letter-spacing: .15pt;"> </span>to<span style="letter-spacing: .15pt;"> </span>10 years should be arranged through borrowing because these can easily be repaid as soon as company's <span style="letter-spacing: 1.6pt;"><span style="mso-spacerun: yes;"> </span></span>financial <span style="letter-spacing: 1.2pt;"><span style="mso-spacerun: yes;"> </span></span>position <span style="letter-spacing: 1.1pt;"><span style="mso-spacerun: yes;"> </span></span>improves. <span style="letter-spacing: 1.45pt;"><span style="mso-spacerun: yes;"> </span></span>In<span style="letter-spacing: 2.95pt;"> </span>such <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>cases, <span style="letter-spacing: .7pt;"><span style="mso-spacerun: yes;"> </span></span>shares <span style="letter-spacing: .75pt;"><span style="mso-spacerun: yes;"> </span></span>should <span style="letter-spacing: .85pt;"><span style="mso-spacerun: yes;"> </span></span>not <span style="letter-spacing: .15pt;"><span style="mso-spacerun: yes;"> </span></span>be<span style="mso-spacerun: yes;"> </span><span style="mso-font-width: 104%;">issued </span>because, share capital except redeemable preference share capital cannot be repaid during the life<span style="letter-spacing: .5pt;">-</span>time<span style="letter-spacing: .6pt;"> </span>of<span style="letter-spacing: .6pt;"> </span>the<span style="letter-spacing: .6pt;"> </span>company<span style="letter-spacing: .6pt;"> </span>even<span style="letter-spacing: .6pt;"> </span>if<span style="letter-spacing: .6pt;"> </span>company<span style="letter-spacing: .6pt;"> </span>is<span style="letter-spacing: .6pt;"> </span>in<span style="letter-spacing: .6pt;"> </span>possession<span style="letter-spacing: .6pt;"> </span>of<span style="letter-spacing: .6pt;"> </span>its<span style="letter-spacing: .6pt;"> </span>own<span style="letter-spacing: .6pt;"> </span>funds.<span style="letter-spacing: .6pt;"> </span>Issue<span style="letter-spacing: .6pt;"> </span>of redeemable preference shares, too should be avoided in such cases as it requires certain legal formalities.<span style="letter-spacing: .05pt;"> </span>On<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>other<span style="letter-spacing: .05pt;"> </span>hand,<span style="letter-spacing: .05pt;"> </span>if<span style="letter-spacing: .05pt;"> </span>funds<span style="letter-spacing: .05pt;"> </span>are<span style="letter-spacing: .05pt;"> </span>required<span style="letter-spacing: .05pt;"> </span>permanently<span style="letter-spacing: .05pt;"> </span>or<span style="letter-spacing: .05pt;"> </span>for<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>fairly<span style="letter-spacing: .05pt;"> </span>long time,<span style="letter-spacing: -.05pt;"> </span>issue<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>ordinary<span style="letter-spacing: -.05pt;"> </span>shares<span style="letter-spacing: -.05pt;"> </span>should<span style="letter-spacing: -.05pt;"> </span>be<span style="letter-spacing: -.05pt;"> </span>preferred.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.15pt; margin-top: .05pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(6)<span style="letter-spacing: .3pt;"> </span>Elasticity<span style="letter-spacing: .65pt;"> </span>of<span style="letter-spacing: .25pt;"> </span>capital<span style="letter-spacing: .5pt;"> </span>structure.<span style="letter-spacing: .55pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">The<span style="letter-spacing: .5pt;"> </span>capital<span style="letter-spacing: .8pt;"> </span>structure<span style="letter-spacing: 1.0pt;"> </span>should<span style="letter-spacing: .8pt;"> </span>be<span style="letter-spacing: .4pt;"> </span>as<span style="letter-spacing: .35pt;"> </span>elastic<span style="letter-spacing: .75pt;"> </span>as<span style="letter-spacing: .35pt;"> </span><span style="mso-font-width: 102%;">possible </span>so<span style="letter-spacing: .4pt;"> </span>as<span style="letter-spacing: .4pt;"> </span>to<span style="letter-spacing: .4pt;"> </span>provide<span style="letter-spacing: .4pt;"> </span>for<span style="letter-spacing: .4pt;"> </span>expansion for<span style="letter-spacing: .35pt;"> </span>future<span style="letter-spacing: .35pt;"> </span>development<span style="letter-spacing: .35pt;"> </span>or<span style="letter-spacing: .35pt;"> </span>to<span style="letter-spacing: .35pt;"> </span>make<span style="letter-spacing: .35pt;"> </span>it<span style="letter-spacing: .35pt;"> </span>feasible<span style="letter-spacing: .35pt;"> </span>to<span style="letter-spacing: .35pt;"> </span>reduce<span style="letter-spacing: .35pt;"> </span>the<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: .05in; margin-top: .35pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">capital when it is not needed. Too much dependence on debentures and preference shares from<span style="letter-spacing: .55pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>very<span style="letter-spacing: .45pt;"> </span>beginning<span style="letter-spacing: 1.5pt;"> </span>makes<span style="letter-spacing: .8pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>capital<span style="letter-spacing: .9pt;"> </span>structure<span style="letter-spacing: 1.3pt;"> </span>of the<span style="letter-spacing: .2pt;"> </span>company<span style="letter-spacing: 1.35pt;"> </span>rigid<span style="letter-spacing: .5pt;"> </span>because<span style="letter-spacing: 1.1pt;"> </span><span style="mso-font-width: 104%;">of </span>payment<span style="letter-spacing: 2.7pt;"> </span>of<span style="letter-spacing: 2.4pt;"> </span>fixed<span style="letter-spacing: 2.55pt;"> </span>interest<span style="letter-spacing: 2.7pt;"> </span>or<span style="letter-spacing: 2.6pt;"> </span>dividend. <span style="letter-spacing: .3pt;"><span style="mso-spacerun: yes;"> </span></span>These <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>sources <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>should<span style="mso-spacerun: yes;"> </span>be<span style="letter-spacing: 2.7pt;"> </span>kept<span style="mso-spacerun: yes;"> </span>in<span style="letter-spacing: 2.65pt;"> </span>reserve <span style="letter-spacing: .4pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 102%;">for </span>emergency or for expansion purposes. Of course, expansion of funds is not a problem and it<span style="letter-spacing: .55pt;"> </span>can<span style="letter-spacing: .95pt;"> </span>very<span style="letter-spacing: 1.15pt;"> </span>easily<span style="letter-spacing: 1.4pt;"> </span>be<span style="letter-spacing: .75pt;"> </span>done<span style="letter-spacing: 1.25pt;"> </span>either<span style="letter-spacing: 1.4pt;"> </span>by<span style="letter-spacing: .8pt;"> </span>issue<span style="letter-spacing: 1.25pt;"> </span>of<span style="letter-spacing: .7pt;"> </span>fresh<span style="letter-spacing: 1.25pt;"> </span>shares<span style="letter-spacing: 1.5pt;"> </span>or<span style="letter-spacing: .7pt;"> </span>debentures<span style="letter-spacing: 2.4pt;"> </span>or<span style="letter-spacing: .7pt;"> </span>by<span style="letter-spacing: .8pt;"> </span><span style="mso-font-width: 104%;">obtaining </span>loan<span style="letter-spacing: 2.9pt;"> </span>from<span style="letter-spacing: 2.9pt;"> </span>financial <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span><span style="letter-spacing: -.1pt;">i</span>nstitutions <span style="letter-spacing: .7pt;"><span style="mso-spacerun: yes;"> </span></span>or<span style="letter-spacing: 2.5pt;"> </span>from<span style="letter-spacing: 2.9pt;"> </span>public <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>but<span style="letter-spacing: 2.65pt;"> </span>contraction <span style="letter-spacing: .8pt;"><span style="mso-spacerun: yes;"> </span></span>of<span style="letter-spacing: 2.5pt;"> </span>capital <span style="letter-spacing: .15pt;"><span style="mso-spacerun: yes;"> </span></span>is<span style="letter-spacing: 2.4pt;"> </span>really<span style="mso-spacerun: yes;"> </span><span style="mso-font-width: 103%;">a </span>problem. To make it feasible, debentures which may be paid off after or within a fixed period<span style="letter-spacing: -.05pt;"> </span>as<span style="letter-spacing: -.1pt;"> </span>per<span style="letter-spacing: -.05pt;"> </span>terms<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>issue<span style="letter-spacing: -.1pt;"> </span>can<span style="letter-spacing: -.1pt;"> </span>be<span style="letter-spacing: -.1pt;"> </span>issued.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.0pt; margin-top: .05pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .1pt;">(7</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">)<span style="mso-tab-count: 1;"> </span>Nature<span style="letter-spacing: 1.95pt;"> </span>of<span style="letter-spacing: 1.7pt;"> </span>Investors.<span style="letter-spacing: .5pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">An<span style="letter-spacing: 1.05pt;"> </span>ideal<span style="letter-spacing: 1.15pt;"> </span>capital<span style="letter-spacing: 1.2pt;"> </span>structure<span style="letter-spacing: 1.3pt;"> </span>is<span style="letter-spacing: 1.0pt;"> </span>that<span style="letter-spacing: 1.7pt;"> </span>which<span style="letter-spacing: 1.9pt;"> </span>suits<span style="letter-spacing: 1.8pt;"> </span>the<span style="letter-spacing: 1.75pt;"> </span>needs<span style="letter-spacing: 1.85pt;"> </span><span style="mso-font-width: 101%;">of </span>different<span style="letter-spacing: 2.45pt;"> </span>types<span style="letter-spacing: 1.8pt;"> </span>of<span style="letter-spacing: 1.2pt;"> </span>investors<span style="letter-spacing: 2.55pt;"> </span>having<span style="letter-spacing: 2.1pt;"> </span>varying<span style="letter-spacing: 2.25pt;"> </span>financial<span style="letter-spacing: 2.5pt;"> </span>status<span style="letter-spacing: 1.9pt;"> </span>and<span style="letter-spacing: 1.5pt;"> </span>varying<span style="letter-spacing: 2.25pt;"> </span><span style="mso-font-width: 104%;">psychologies.</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.05pt; margin-top: .4pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Some<span style="letter-spacing: 1.2pt;"> </span>investors<span style="letter-spacing: 1.2pt;"> </span>who<span style="letter-spacing: 1.2pt;"> </span>prefer<span style="letter-spacing: 1.2pt;"> </span>security<span style="letter-spacing: 1.2pt;"> </span>of<span style="letter-spacing: 1.2pt;"> </span>investment<span style="letter-spacing: 1.2pt;"> </span>and<span style="letter-spacing: 1.2pt;"> </span>stability<span style="letter-spacing: 1.2pt;"> </span>of<span style="letter-spacing: 1.2pt;"> </span>income<span style="letter-spacing: 1.2pt;"> </span>usually<span style="letter-spacing: 1.2pt;"> </span>go<span style="letter-spacing: 1.2pt;"> </span>in for debentures. Preference shares will be preferred by those<span style="letter-spacing: .05pt;"> </span>who<span style="letter-spacing: .05pt;"> </span>want<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>higher<span style="letter-spacing: .05pt;"> </span>and<span style="letter-spacing: .05pt;"> </span>stable income<span style="letter-spacing: 1.2pt;"> </span>with<span style="letter-spacing: 1.2pt;"> </span>enough<span style="letter-spacing: 1.2pt;"> </span>safety<span style="letter-spacing: 1.2pt;"> </span>of<span style="letter-spacing: 1.2pt;"> </span>investment.<span style="letter-spacing: 1.2pt;"> </span>Equity<span style="letter-spacing: 1.2pt;"> </span>shares<span style="letter-spacing: 1.2pt;"> </span>will<span style="letter-spacing: 1.2pt;"> </span>be<span style="letter-spacing: 1.2pt;"> </span>taken<span style="letter-spacing: 1.2pt;"> </span>up<span style="letter-spacing: 1.2pt;"> </span>by<span style="letter-spacing: 1.2pt;"> </span>those<span style="letter-spacing: 1.2pt;"> </span>who are<span style="letter-spacing: 1.1pt;"> </span>ready<span style="letter-spacing: 1.6pt;"> </span>to<span style="letter-spacing: .9pt;"> </span>take<span style="letter-spacing: 1.3pt;"> </span>risks<span style="letter-spacing: 1.4pt;"> </span>for<span style="letter-spacing: 1.05pt;"> </span>higher<span style="letter-spacing: 1.75pt;"> </span>income<span style="letter-spacing: 1.9pt;"> </span>and<span style="letter-spacing: 1.2pt;"> </span>capital<span style="letter-spacing: 1.8pt;"> </span>appreciation.<span style="mso-spacerun: yes;"> </span>Those<span style="letter-spacing: 1.7pt;"> </span>who<span style="letter-spacing: 1.35pt;"> </span>want<span style="letter-spacing: 1.45pt;"> </span><span style="mso-font-width: 104%;">to </span>acquire<span style="letter-spacing: -.05pt;"> </span>control<span style="letter-spacing: -.05pt;"> </span>over<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>affairs<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>company<span style="letter-spacing: -.05pt;"> </span>like equity<span style="letter-spacing: -.05pt;"> </span>shares.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.8pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">Security<span style="letter-spacing: 1.75pt;"> </span>with<span style="letter-spacing: 1.05pt;"> </span>different<span style="letter-spacing: 1.85pt;"> </span>denominations<span style="mso-spacerun: yes;"> </span>should<span style="letter-spacing: 1.45pt;"> </span>be<span style="letter-spacing: .65pt;"> </span>issued<span style="letter-spacing: 1.4pt;"> </span>to<span style="letter-spacing: .55pt;"> </span>suit<span style="letter-spacing: .85pt;"> </span>the<span style="letter-spacing: .75pt;"> </span>financial<span style="letter-spacing: 1.85pt;"> </span>status<span style="letter-spacing: 1.25pt;"> </span><span style="mso-font-width: 104%;">of </span>different persons in order to secure subscription from people in different strata of society- rich,<span style="letter-spacing: -.25pt;"> </span>middle,<span style="letter-spacing: -.25pt;"> </span>and<span style="letter-spacing: -.25pt;"> </span>lower<span style="letter-spacing: -.25pt;"> </span>clasess.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.8pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .1pt;">(8</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">)<span style="mso-tab-count: 1;"> </span><span style="letter-spacing: .2pt;">Marke</span>t<span style="letter-spacing: -.75pt;"> </span><span style="letter-spacing: .2pt;">Conditions</span>.<span style="letter-spacing: .35pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: -.05pt;">Con</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;">ditions<span style="letter-spacing: .7pt;"> </span>of<span style="letter-spacing: .65pt;"> </span>capital<span style="letter-spacing: 1.1pt;"> </span>market<span style="letter-spacing: 1.1pt;"> </span>have<span style="letter-spacing: .9pt;"> </span>an<span style="letter-spacing: .65pt;"> </span>important<span style="letter-spacing: 1.4pt;"> </span>bearing<span style="letter-spacing: 1.15pt;"> </span><span style="mso-font-width: 102%;">on </span>the<span style="letter-spacing: 1.6pt;"> </span>capital<span style="letter-spacing: 2.3pt;"> </span>structure<span style="letter-spacing: 2.7pt;"> </span>of<span style="letter-spacing: 1.4pt;"> </span>the<span style="letter-spacing: 1.6pt;"> </span>company<span style="letter-spacing: 2.75pt;"> </span>because<span style="letter-spacing: 2.5pt;"> </span>investor<span style="letter-spacing: 2.55pt;"> </span>is<span style="letter-spacing: 1.3pt;"> </span>very<span style="letter-spacing: 1.85pt;"> </span>often<span style="letter-spacing: 2.0pt;"> </span>influenced<span style="mso-spacerun: yes;"> </span>by<span style="letter-spacing: 1.5pt;"> </span><span style="mso-font-width: 104%;">the</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.75pt; margin-top: .4pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">general<span style="letter-spacing: 1.0pt;"> </span>mood<span style="letter-spacing: .7pt;"> </span>or sentiment<span style="letter-spacing: 1.45pt;"> </span>of the<span style="letter-spacing: .2pt;"> </span>capital<span style="letter-spacing: .9pt;"> </span>market<span style="letter-spacing: .95pt;"> </span>although<span style="letter-spacing: 1.3pt;"> </span>his<span style="letter-spacing: .15pt;"> </span>own<span style="letter-spacing: .45pt;"> </span>mood<span style="letter-spacing: .7pt;"> </span>or <span style="mso-font-width: 104%;">sentiments </span>guide<span style="letter-spacing: 1.75pt;"> </span>him<span style="letter-spacing: 1.7pt;"> </span>to<span style="letter-spacing: 1.6pt;"> </span>invest<span style="letter-spacing: 1.8pt;"> </span>his<span style="letter-spacing: 1.65pt;"> </span>funds.<span style="letter-spacing: .25pt;"> </span>For<span style="letter-spacing: 1.5pt;"> </span>example,<span style="letter-spacing: 2.0pt;"> </span>in<span style="letter-spacing: 1.35pt;"> </span>times<span style="letter-spacing: 1.65pt;"> </span>of<span style="letter-spacing: 1.35pt;"> </span>depression,<span style="letter-spacing: 2.25pt;"> </span>investor<span style="letter-spacing: 1.9pt;"> </span>will<span style="letter-spacing: 1.5pt;"> </span><span style="mso-font-width: 102%;">look </span>more for safety than to income and will be willing to invest in debenture and not in equity shares.<span style="letter-spacing: 1.65pt;"> </span>During<span style="letter-spacing: 1.7pt;"> </span>boom<span style="letter-spacing: 1.45pt;"> </span>period,<span style="letter-spacing: 1.7pt;"> </span>when<span style="letter-spacing: 1.4pt;"> </span>people<span style="letter-spacing: 1.65pt;"> </span>have<span style="letter-spacing: 1.25pt;"> </span>plethora<span style="letter-spacing: 1.9pt;"> </span>of<span style="letter-spacing: .75pt;"> </span>funds,<span style="letter-spacing: 1.55pt;"> </span>any<span style="letter-spacing: 1.05pt;"> </span>type<span style="letter-spacing: 1.15pt;"> </span>of<span style="letter-spacing: .75pt;"> </span><span style="mso-font-width: 104%;">security </span>can<span style="letter-spacing: 2.6pt;"> </span>be<span style="letter-spacing: 2.55pt;"> </span>sold<span style="letter-spacing: 2.65pt;"> </span>easily<span style="letter-spacing: 2.7pt;"> </span>hen<span style="letter-spacing: -.1pt;">c</span>e<span style="letter-spacing: 2.55pt;"> </span>equities <span style="letter-spacing: .3pt;"><span style="mso-spacerun: yes;"> </span></span>can<span style="letter-spacing: 2.7pt;"> </span>have<span style="letter-spacing: 2.85pt;"> </span>a<span style="letter-spacing: 2.35pt;"> </span>better<span style="mso-spacerun: yes;"> </span>market. <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>The<span style="letter-spacing: 2.75pt;"> </span>management <span style="letter-spacing: 1.0pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 103%;">while </span>designing the capital structure of the company must watch the mood or sentiment of the capital<span style="letter-spacing: -.8pt;"> </span>market.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.7pt; margin-top: 1.5pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .1pt; line-height: 99%;">(9</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">)<span style="mso-tab-count: 1;"> </span>Legal<span style="letter-spacing: 2.65pt;"> </span>Restrictions.<span style="letter-spacing: 3.0pt;"> </span>Every<span style="letter-spacing: 2.65pt;"> </span>company <span style="letter-spacing: .65pt;"><span style="mso-spacerun: yes;"> </span></span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">has <span style="letter-spacing: .5pt;"><span style="mso-spacerun: yes;"> </span></span>to <span style="letter-spacing: .55pt;"><span style="mso-spacerun: yes;"> </span></span>comply <span style="letter-spacing: 1.05pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .65pt;"><span style="mso-spacerun: yes;"> </span></span>law <span style="letter-spacing: .7pt;"><span style="mso-spacerun: yes;"> </span></span>of <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .65pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 101%;">country </span>regarding<span style="letter-spacing: 1.2pt;"> </span>the<span style="letter-spacing: .9pt;"> </span>issue<span style="letter-spacing: .25pt;"> </span>of<span style="letter-spacing: 1.15pt;"> </span>different<span style="letter-spacing: 1.15pt;"> </span>types<span style="letter-spacing: 1.15pt;"> </span>of<span style="letter-spacing: 1.15pt;"> </span>securities.<span style="letter-spacing: 1.15pt;"> </span>Therefore,<span style="letter-spacing: 1.15pt;"> </span>hands<span style="letter-spacing: 1.15pt;"> </span>of<span style="letter-spacing: 1.15pt;"> </span>the<span style="letter-spacing: 1.15pt;"> </span>management are<span style="letter-spacing: 1.55pt;"> </span>tied<span style="letter-spacing: 1.65pt;"> </span>by<span style="letter-spacing: 1.45pt;"> </span>these<span style="letter-spacing: 1.95pt;"> </span>legal<span style="letter-spacing: 1.9pt;"> </span>restrictions. <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>For<span style="letter-spacing: 1.6pt;"> </span>example<span style="letter-spacing: 2.55pt;"> </span>in<span style="letter-spacing: 1.3pt;"> </span></span><st1:country-region><st1:place><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">India</span></st1:place></st1:country-region><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">,<span style="letter-spacing: 2.05pt;"> </span>Banking<span style="letter-spacing: 2.55pt;"> </span>companies<span style="mso-spacerun: yes;"> </span>are<span style="letter-spacing: 1.55pt;"> </span><span style="mso-font-width: 104%;">not </span>allowed<span style="letter-spacing: 1.15pt;"> </span>to issue<span style="letter-spacing: .6pt;"> </span>any<span style="letter-spacing: .3pt;"> </span>type<span style="letter-spacing: .45pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>securities<span style="letter-spacing: 1.45pt;"> </span>except<span style="letter-spacing: .9pt;"> </span>equity<span style="letter-spacing: .85pt;"> </span>shares<span style="letter-spacing: .85pt;"> </span>under<span style="letter-spacing: .7pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>Indian<span style="letter-spacing: .85pt;"> </span><span style="mso-font-width: 104%;">Banking </span>Companies<span style="letter-spacing: .85pt;"> </span>Act. Again,<span style="letter-spacing: .85pt;"> </span>under<span style="letter-spacing: .85pt;"> </span>control<span style="letter-spacing: .85pt;"> </span>of<span style="letter-spacing: .85pt;"> </span>Capital<span style="letter-spacing: .85pt;"> </span>Issues<span style="letter-spacing: .85pt;"> </span>Act<span style="letter-spacing: .85pt;"> </span>in<span style="letter-spacing: .85pt;"> </span></span><st1:country-region><st1:place><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">India</span></st1:place></st1:country-region><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .85pt; line-height: 99%;"> </span><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">has<span style="letter-spacing: .85pt;"> </span>fixed<span style="letter-spacing: .85pt;"> </span>4<span style="letter-spacing: .85pt;"> </span>:<span style="letter-spacing: .85pt;"> </span>1<span style="letter-spacing: .85pt;"> </span>ratio between debt and equity and 3 : 1 between equity and preferred stock. Within this overall framework,<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>management<span style="letter-spacing: -.1pt;"> </span>should<span style="letter-spacing: -.1pt;"> </span>strive<span style="letter-spacing: -.1pt;"> </span>towards<span style="letter-spacing: -.1pt;"> </span>capital<span style="letter-spacing: -.1pt;"> </span>structure.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">(10</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">)<span style="mso-tab-count: 1;"> </span>Policy<span style="letter-spacing: .4pt;"> </span>of<span style="letter-spacing: .2pt;"> </span>Term<span style="letter-spacing: .4pt;"> </span>Financing<span style="letter-spacing: .9pt;"> </span>Institution. </span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">If<span style="letter-spacing: .3pt;"> </span>financial<span style="letter-spacing: 1.0pt;"> </span>institutions<span style="letter-spacing: 1.2pt;"> </span>offer<span style="letter-spacing: .6pt;"> </span>credit<span style="letter-spacing: .7pt;"> </span>to<span style="letter-spacing: .35pt;"> </span><span style="mso-font-width: 102%;">the</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.1pt; margin-top: .55pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">industry on strictly restrictive terms and adopt harsh policy of lending, the management will give more weightage to manueverability principle and abstain from borrowing from these institutions<span style="letter-spacing: .45pt;"> </span>and<span style="letter-spacing: .8pt;"> </span>will<span style="letter-spacing: .85pt;"> </span>arrange<span style="letter-spacing: 1.4pt;"> </span>capital<span style="letter-spacing: 1.25pt;"> </span>from<span style="letter-spacing: 1.0pt;"> </span>other<span style="letter-spacing: 1.05pt;"> </span>sources.<span style="letter-spacing: 1.45pt;"> </span>On<span style="letter-spacing: .75pt;"> </span>the<span style="letter-spacing: .75pt;"> </span>other<span style="letter-spacing: 1.05pt;"> </span>hand,<span style="letter-spacing: 1.1pt;"> </span>if<span style="letter-spacing: .5pt;"> </span><span style="mso-font-width: 103%;">the </span>financial institutions provide credit on soft terms, the firm will follow cost principle in obtaining<span style="letter-spacing: -.1pt;"> </span>funds<span style="letter-spacing: -.1pt;"> </span>from<span style="letter-spacing: -.1pt;"> </span>these<span style="letter-spacing: -.1pt;"> </span>institutions<span style="letter-spacing: -.1pt;"> </span>on<span style="letter-spacing: -.1pt;"> </span>easy<span style="letter-spacing: -.1pt;"> </span>terms<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.15pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">(11)<span style="letter-spacing: .45pt;"> </span>Stability<span style="letter-spacing: .7pt;"> </span>of<span style="letter-spacing: .35pt;"> </span>Earning<span style="letter-spacing: .65pt;"> </span>or<span style="letter-spacing: .35pt;"> </span>Possibilities<span style="letter-spacing: 1.3pt;"> </span>of<span style="letter-spacing: .8pt;"> </span>Regular<span style="letter-spacing: 1.1pt;"> </span>and<span style="letter-spacing: .9pt;"> </span>Fixed<span style="letter-spacing: 1.0pt;"> </span>Income.<span style="letter-spacing: .4pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">The<span style="letter-spacing: 1.5pt;"> </span>stability of capital structure of a company very much depends upon the possibility of regular and fixed<span style="letter-spacing: -.05pt;"> </span>income.<span style="letter-spacing: -.05pt;"> </span>Mr.<span style="letter-spacing: -.05pt;"> </span>A.<span style="letter-spacing: -.05pt;"> </span>S.<span style="letter-spacing: -.05pt;"> </span>Dewing<span style="letter-spacing: -.05pt;"> </span>has<span style="letter-spacing: -.05pt;"> </span>propounded<span style="letter-spacing: -.05pt;"> </span>three<span style="letter-spacing: -.05pt;"> </span>principles<span style="letter-spacing: -.05pt;"> </span>in<span style="letter-spacing: -.05pt;"> </span>this<span style="letter-spacing: -.05pt;"> </span>regard.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.95pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">(a</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;">)<span style="mso-tab-count: 1;"> </span>If<span style="letter-spacing: 2.45pt;"> </span>company<span style="letter-spacing: 2.8pt;"> </span>expects<span style="letter-spacing: 2.7pt;"> </span>sufficient<span style="letter-spacing: 2.8pt;"> </span>regul<span style="letter-spacing: -.15pt;">a</span>r <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>income <span style="letter-spacing: .55pt;"><span style="mso-spacerun: yes;"> </span></span>in <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>future, <span style="letter-spacing: .5pt;"><span style="mso-spacerun: yes;"> </span></span>debenture <span style="letter-spacing: .8pt;"><span style="mso-spacerun: yes;"> </span></span>should <span style="letter-spacing: .5pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 102%;">be </span>issued.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.15pt; margin-top: .35pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .1pt; line-height: 100%;">(b</span><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">)<span style="mso-tab-count: 1;"> </span>Preference<span style="letter-spacing: .25pt;"> </span>shares<span style="letter-spacing: .25pt;"> </span>may<span style="letter-spacing: .25pt;"> </span>be<span style="letter-spacing: .25pt;"> </span>issued<span style="letter-spacing: .25pt;"> </span>if<span style="letter-spacing: .25pt;"> </span>company<span style="letter-spacing: .25pt;"> </span>does<span style="letter-spacing: .25pt;"> </span>not<span style="letter-spacing: .25pt;"> </span>expect<span style="letter-spacing: .25pt;"> </span>regular<span style="letter-spacing: .25pt;"> </span>income<span style="letter-spacing: .25pt;"> </span>but<span style="letter-spacing: .25pt;"> </span>it is<span style="letter-spacing: .1pt;"> </span>hopeful<span style="letter-spacing: 1.25pt;"> </span>that<span style="letter-spacing: .5pt;"> </span>its<span style="letter-spacing: .25pt;"> </span>average<span style="letter-spacing: 1.3pt;"> </span>earnings<span style="letter-spacing: 1.4pt;"> </span>for<span style="letter-spacing: .35pt;"> </span>a few<span style="letter-spacing: .5pt;"> </span>years<span style="letter-spacing: .8pt;"> </span>may<span style="letter-spacing: .6pt;"> </span>be<span style="letter-spacing: .25pt;"> </span>equal<span style="letter-spacing: .85pt;"> </span>to<span style="letter-spacing: .15pt;"> </span>or<span style="letter-spacing: .2pt;"> </span>in<span style="letter-spacing: .15pt;"> </span>excess<span style="letter-spacing: 1.05pt;"> </span>of<span style="letter-spacing: .2pt;"> </span><span style="mso-font-width: 104%;">the </span>amount<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>dividend<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span>be<span style="letter-spacing: .05pt;"> </span>paid<span style="letter-spacing: .05pt;"> </span>on<span style="letter-spacing: .05pt;"> </span>such<span style="letter-spacing: -.6pt;"> </span>preference<span style="letter-spacing: -.6pt;"> </span>shares.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.1pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">(c</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;">)<span style="mso-tab-count: 1;"> </span>If<span style="letter-spacing: .8pt;"> </span>company<span style="letter-spacing: 2.3pt;"> </span>does<span style="letter-spacing: 1.45pt;"> </span>not<span style="letter-spacing: 1.15pt;"> </span>expect<span style="letter-spacing: 1.8pt;"> </span>any<span style="letter-spacing: 1.25pt;"> </span>regular<span style="letter-spacing: 1.9pt;"> </span>income<span style="letter-spacing: 1.95pt;"> </span>in<span style="letter-spacing: .9pt;"> </span>future,<span style="letter-spacing: 1.8pt;"> </span>it<span style="letter-spacing: .8pt;"> </span>should<span style="letter-spacing: 1.5pt;"> </span>never<span style="letter-spacing: 1.6pt;"> </span><span style="mso-font-width: 104%;">issue </span>any<span style="letter-spacing: -.1pt;"> </span>type<span style="letter-spacing: -.1pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>securities<span style="letter-spacing: -.1pt;"> </span>other<span style="letter-spacing: -.1pt;"> </span>than<span style="letter-spacing: -.1pt;"> </span>equity<span style="letter-spacing: -.1pt;"> </span>shares.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 102%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.4pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 102%;">The<span style="letter-spacing: 2.05pt;"> </span>above<span style="letter-spacing: 2.45pt;"> </span>factors<span style="letter-spacing: 2.65pt;"> </span>are<span style="letter-spacing: 1.9pt;"> </span>important <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>to<span style="letter-spacing: 1.7pt;"> </span>bear<span style="letter-spacing: 2.15pt;"> </span>in<span style="letter-spacing: 1.7pt;"> </span>mind<span style="letter-spacing: 2.3pt;"> </span>to<span style="letter-spacing: 1.7pt;"> </span>devise<span style="letter-spacing: 2.55pt;"> </span>the<span style="letter-spacing: 1.9pt;"> </span>capital<span style="letter-spacing: 2.6pt;"> </span>structure<span style="mso-spacerun: yes;"> </span>of<span style="letter-spacing: 1.7pt;"> </span><span style="mso-font-width: 104%;">a </span>company.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.05pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.3pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">(12</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">)<span style="mso-tab-count: 1;"> </span>Trends<span style="letter-spacing: 2.7pt;"> </span>in<span style="letter-spacing: 2.45pt;"> </span>Capital<span style="letter-spacing: 2.75pt;"> </span>Market.<span style="letter-spacing: .35pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Capital<span style="letter-spacing: 2.25pt;"> </span>market<span style="letter-spacing: 2.2pt;"> </span>conditions<span style="letter-spacing: 2.55pt;"> </span>determine<span style="letter-spacing: 2.5pt;"> </span>not<span style="letter-spacing: 1.85pt;"> </span>only<span style="letter-spacing: 2.0pt;"> </span><span style="mso-font-width: 102%;">the</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">types<span style="letter-spacing: .85pt;"> </span>of<span style="letter-spacing: .85pt;"> </span>securities<span style="letter-spacing: .85pt;"> </span>to<span style="letter-spacing: .85pt;"> </span>be<span style="letter-spacing: .85pt;"> </span>issued,<span style="letter-spacing: .85pt;"> </span>but<span style="letter-spacing: .85pt;"> </span>also<span style="letter-spacing: .85pt;"> </span>the<span style="letter-spacing: .85pt;"> </span>rate<span style="letter-spacing: .85pt;"> </span>of<span style="letter-spacing: .85pt;"> </span>interest<span style="letter-spacing: .85pt;"> </span>on<span style="letter-spacing: .85pt;"> </span>debentures,<span style="letter-spacing: .85pt;"> </span>fixed<span style="letter-spacing: .85pt;"> </span>rates<span style="letter-spacing: .85pt;"> </span>of<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.9pt; margin-top: .5pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">dividends on preference shares and the prices of equity shares. When investment funds decline better yields and protection for preference shares are demanded. When such funds increase, <span style="letter-spacing: 1.3pt;"><span style="mso-spacerun: yes;"> </span></span>preference <span style="letter-spacing: 1.65pt;"><span style="mso-spacerun: yes;"> </span></span>shares <span style="letter-spacing: .85pt;"><span style="mso-spacerun: yes;"> </span></span>may <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>be <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>sold <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>on <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>terms <span style="letter-spacing: .7pt;"><span style="mso-spacerun: yes;"> </span></span>more <span style="letter-spacing: .6pt;"><span style="mso-spacerun: yes;"> </span></span>favourable <span style="letter-spacing: 1.7pt;"><span style="mso-spacerun: yes;"> </span></span>to<span style="mso-spacerun: yes;"> </span>the <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 104%;">issuing </span>company.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 6.45pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">(13</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">)<span style="mso-tab-count: 1;"> </span><span style="mso-font-width: 102%;">Cost</span><span style="letter-spacing: 1.05pt;"> </span><span style="mso-font-width: 102%;">of</span><span style="letter-spacing: 1.05pt;"> </span><span style="mso-font-width: 102%;">Capital</span><span style="letter-spacing: 1.05pt;"> </span><span style="mso-font-width: 102%;">and</span><span style="letter-spacing: 1.05pt;"> </span><span style="mso-font-width: 102%;">Availability</span><span style="letter-spacing: 1.05pt;"> </span><span style="mso-font-width: 102%;">of</span><span style="letter-spacing: 1.05pt;"> </span><span style="mso-font-width: 102%;">Funds.</span><span style="letter-spacing: -.05pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 101%;">The</span><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .9pt;"> </span><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 101%;">exact</span><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .9pt;"> </span><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 101%;">form</span><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .9pt;"> </span><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 101%;">of</span><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .9pt;"> </span><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 101%;">financing</span><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .9pt;"> </span><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 101%;">is,</span><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: -.55pt;"> </span><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: 1.0pt;">a</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;">t<span style="letter-spacing: -2.0pt;"> </span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.05pt; margin-top: .5pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">times, the result of the study of comparative costs of various types of financing in relation to the<span style="letter-spacing: .2pt;"> </span>risk<span style="letter-spacing: .35pt;"> </span>involved<span style="letter-spacing: 1.3pt;"> </span>and<span style="letter-spacing: .3pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>availability<span style="letter-spacing: 1.8pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>various<span style="letter-spacing: 1.05pt;"> </span>alternative<span style="letter-spacing: 1.65pt;"> </span>forms<span style="letter-spacing: .75pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>financing.<span style="letter-spacing: 1.55pt;"> </span>In<span style="letter-spacing: .05pt;"> </span><span style="mso-font-width: 104%;">a </span>certain<span style="letter-spacing: .7pt;"> </span>situation,<span style="letter-spacing: 1.05pt;"> </span>debentures<span style="letter-spacing: 1.25pt;"> </span>may<span style="letter-spacing: .3pt;"> </span>be<span style="letter-spacing: .05pt;"> </span>issued<span style="letter-spacing: .6pt;"> </span>because<span style="letter-spacing: .85pt;"> </span>of their<span style="letter-spacing: .35pt;"> </span>cheapn<span style="letter-spacing: -.15pt;">e</span>ss<span style="letter-spacing: 2.1pt;"> </span>and<span style="letter-spacing: 1.0pt;"> </span><span style="mso-font-width: 101%;">availability </span>despite<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>danger<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>fixed<span style="letter-spacing: -.1pt;"> </span>obligaiton.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.35pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">(14</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">)<span style="mso-tab-count: 1;"> </span>Prevailing <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>Financial<span style="letter-spacing: 3.0pt;"> </span>Statutes.<span style="letter-spacing: .4pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Government<span style="letter-spacing: 2.5pt;"> </span>may<span style="letter-spacing: 1.7pt;"> </span>also<span style="letter-spacing: 1.7pt;"> </span>influence<span style="letter-spacing: 2.2pt;"> </span>the<span style="letter-spacing: 1.6pt;"> </span>scheme<span style="letter-spacing: 2.0pt;"> </span><span style="mso-font-width: 102%;">of</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.1pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">company<span style="letter-spacing: 1.4pt;"> </span>finance<span style="letter-spacing: 1.05pt;"> </span>in more<span style="letter-spacing: .6pt;"> </span>ways<span style="letter-spacing: .6pt;"> </span>than<span style="letter-spacing: .45pt;"> </span>one,<span style="letter-spacing: .45pt;"> </span>for<span style="letter-spacing: .2pt;"> </span>example,<span style="letter-spacing: 1.35pt;"> </span>through<span style="letter-spacing: 1.1pt;"> </span>regulation<span style="letter-spacing: 1.55pt;"> </span>and<span style="letter-spacing: .3pt;"> </span><span style="mso-font-width: 104%;">taxation </span>policies,<span style="letter-spacing: .3pt;"> </span>etc.<span style="letter-spacing: .1pt;"> </span>This<span style="letter-spacing: .15pt;"> </span>factor<span style="letter-spacing: .2pt;"> </span>is of<span style="letter-spacing: .75pt;"> </span>special<span style="letter-spacing: .65pt;"> </span>significance<span style="letter-spacing: .65pt;"> </span>in<span style="letter-spacing: .65pt;"> </span>Indian<span style="letter-spacing: .65pt;"> </span>India<span style="letter-spacing: .65pt;"> </span>companies<span style="letter-spacing: .65pt;"> </span>the<span style="letter-spacing: .65pt;"> </span>rates<span style="letter-spacing: .65pt;"> </span>of income tax are the highest in the world. High rates of corporation taxes put a premium on debt financing as compared with equity or preference shares, because while interest on debentures<span style="letter-spacing: 1.15pt;"> </span>is<span style="letter-spacing: 1.25pt;"> </span>allowed<span style="letter-spacing: 1.55pt;"> </span>as<span style="letter-spacing: 1.05pt;"> </span>a<span style="letter-spacing: .9pt;"> </span>deduction<span style="letter-spacing: 2.15pt;"> </span>from<span style="letter-spacing: 1.45pt;"> </span>taxable<span style="letter-spacing: 1.8pt;"> </span>income,<span style="letter-spacing: 1.9pt;"> </span>the<span style="letter-spacing: 1.2pt;"> </span>payment<span style="letter-spacing: 2.0pt;"> </span>of<span style="letter-spacing: 1.05pt;"> </span>dividend<span style="letter-spacing: 2.0pt;"> </span><span style="mso-font-width: 103%;">is </span>not,<span style="letter-spacing: -.2pt;"> </span>(advantage<span style="letter-spacing: -.2pt;"> </span>of<span style="letter-spacing: -.2pt;"> </span>Tax<span style="letter-spacing: -.2pt;"> </span>Shield).<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.85pt; margin-top: 1.55pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt; line-height: 99%;">(15</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">)<span style="mso-tab-count: 1;"> </span><span style="letter-spacing: .35pt;">Asset</span>s<span style="letter-spacing: -.8pt;"> </span><span style="letter-spacing: .35pt;">Structure</span>.<span style="letter-spacing: .7pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Asset<span style="letter-spacing: 2.9pt;"> </span>structure <span style="letter-spacing: .35pt;"><span style="mso-spacerun: yes;"> </span></span>also<span style="letter-spacing: 2.7pt;"> </span>influences <span style="letter-spacing: .6pt;"><span style="mso-spacerun: yes;"> </span></span>the<span style="letter-spacing: 2.55pt;"> </span>sources <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>of<span style="letter-spacing: 2.4pt;"> </span>financing <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 103%;">in </span>several<span style="letter-spacing: .1pt;"> </span>ways.<span style="letter-spacing: .1pt;"> </span>Firms<span style="letter-spacing: .1pt;"> </span>with<span style="letter-spacing: .1pt;"> </span>long-<span style="letter-spacing: -1.75pt;"> </span>lived<span style="letter-spacing: .05pt;"> </span>fixed<span style="letter-spacing: .05pt;"> </span>assets,<span style="letter-spacing: .05pt;"> </span>specially<span style="letter-spacing: .05pt;"> </span>when<span style="letter-spacing: .05pt;"> </span>demand<span style="letter-spacing: .05pt;"> </span>for<span style="letter-spacing: .5pt;"> </span>the<span style="letter-spacing: .5pt;"> </span>output<span style="letter-spacing: .5pt;"> </span>is relatively<span style="letter-spacing: -.05pt;"> </span>assured<span style="letter-spacing: -.05pt;"> </span>can<span style="letter-spacing: -.1pt;"> </span>use<span style="letter-spacing: -.1pt;"> </span>long<span style="letter-spacing: .5pt;">-</span>term<span style="letter-spacing: .2pt;"> </span>debts.<span style="letter-spacing: .2pt;"> </span>Firms<span style="letter-spacing: .2pt;"> </span>whose<span style="letter-spacing: .2pt;"> </span>assets<span style="letter-spacing: .2pt;"> </span>are<span style="letter-spacing: .2pt;"> </span>mostly<span style="letter-spacing: .2pt;"> </span>receivables<span style="letter-spacing: .2pt;"> </span>and inventory whose value is dependent on the continued profitability of the individual firm can<span style="letter-spacing: -.15pt;"> </span>rely<span style="letter-spacing: -.15pt;"> </span>less<span style="letter-spacing: -.15pt;"> </span>long<span style="letter-spacing: .5pt;">-</span>term<span style="letter-spacing: -.15pt;"> </span>debt<span style="letter-spacing: -.15pt;"> </span>financing<span style="letter-spacing: -.15pt;"> </span>and<span style="letter-spacing: -.15pt;"> </span>more<span style="letter-spacing: -.15pt;"> </span>on<span style="letter-spacing: -.15pt;"> </span>short<span style="letter-spacing: .5pt;">-</span>term<span style="letter-spacing: .05pt;"> </span>funds.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.05pt; margin-top: .55pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt; line-height: 99%;">(16</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">)<span style="mso-tab-count: 1;"> </span>Attitude <span style="letter-spacing: .8pt;"><span style="mso-spacerun: yes;"> </span></span>of <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>management.<span style="letter-spacing: .65pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Management <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>varies<span style="letter-spacing: 2.5pt;"> </span>in<span style="letter-spacing: 2.15pt;"> </span>skill,<span style="letter-spacing: 2.4pt;"> </span>judgment,<span style="letter-spacing: 2.9pt;"> </span><span style="mso-font-width: 102%;">experience, </span>temperament and motivation. It evaluates the same risk differently and its willingness to employ<span style="letter-spacing: 2.45pt;"> </span>debt<span style="letter-spacing: 1.85pt;"> </span>finance<span style="letter-spacing: 2.4pt;"> </span>also<span style="letter-spacing: 1.75pt;"> </span>differs.<span style="letter-spacing: 2.35pt;"> </span>The<span style="letter-spacing: 1.75pt;"> </span>capital<span style="letter-spacing: 2.3pt;"> </span>structure,<span style="letter-spacing: 2.8pt;"> </span>therefore,<span style="letter-spacing: 2.85pt;"> </span>is<span style="letter-spacing: 1.3pt;"> </span>to<span style="letter-spacing: 1.35pt;"> </span>a<span style="letter-spacing: 1.2pt;"> </span>la<span style="letter-spacing: -.4pt;">r</span><span style="letter-spacing: .35pt;">g</span>e<span style="letter-spacing: -.25pt;"> </span><span style="letter-spacing: .35pt;">extent, </span>equally influenced by the age, experience, ambition, confidence and conservativeness of the<span style="letter-spacing: -.4pt;"> </span>managements.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.4pt; margin-top: .55pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt; line-height: 99%;">(17</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">)<span style="mso-tab-count: 1;"> </span><span style="letter-spacing: .6pt;">Lender'</span>s<span style="letter-spacing: .2pt;"> </span><span style="letter-spacing: .6pt;">Attitude</span>.<span style="letter-spacing: 1.6pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Sometimes, <span style="letter-spacing: 2.9pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: 2.05pt;"><span style="mso-spacerun: yes;"> </span></span>lender's <span style="letter-spacing: 2.5pt;"><span style="mso-spacerun: yes;"> </span></span>attitude <span style="letter-spacing: 2.45pt;"><span style="mso-spacerun: yes;"> </span></span>is <span style="letter-spacing: 1.9pt;"><span style="mso-spacerun: yes;"> </span></span>also <span style="letter-spacing: 2.15pt;"><span style="mso-spacerun: yes;"> </span></span>an <span style="letter-spacing: 2.0pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 102%;">important </span>determinant <span style="letter-spacing: 1.4pt;"><span style="mso-spacerun: yes;"> </span></span>of<span style="mso-spacerun: yes;"> </span>capital <span style="letter-spacing: .65pt;"><span style="mso-spacerun: yes;"> </span></span>structure. <span style="letter-spacing: 1.05pt;"><span style="mso-spacerun: yes;"> </span></span>In<span style="mso-spacerun: yes;"> </span>the <span style="letter-spacing: .15pt;"><span style="mso-spacerun: yes;"> </span></span>majority <span style="letter-spacing: .9pt;"><span style="mso-spacerun: yes;"> </span></span>of<span style="mso-spacerun: yes;"> </span>cases, <span style="letter-spacing: .55pt;"><span style="mso-spacerun: yes;"> </span></span>t<span style="letter-spacing: -.95pt;">h</span>e <span style="letter-spacing: 1.2pt;"><span style="mso-spacerun: yes;"> </span></span>firm's <span style="letter-spacing: 1.15pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 101%;">management </span>discusses<span style="letter-spacing: 1.4pt;"> </span>its<span style="letter-spacing: .1pt;"> </span>capital<span style="letter-spacing: .9pt;"> </span>structure<span style="letter-spacing: 1.3pt;"> </span>with<span style="letter-spacing: .5pt;"> </span>lenders<span style="letter-spacing: 1.0pt;"> </span>and<span style="letter-spacing: .3pt;"> </span>gives<span style="letter-spacing: .65pt;"> </span>much<span style="letter-spacing: .7pt;"> </span>weight<span style="letter-spacing: .95pt;"> </span>to their<span style="letter-spacing: .5pt;"> </span>advice.<span style="letter-spacing: 1.0pt;"> </span><span style="mso-font-width: 104%;">But </span>where management is the confident of future, it may use leverage beyond norms for the <span style="letter-spacing: -.05pt;">industry.</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.05pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">(18</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">)<span style="mso-tab-count: 1;"> </span>Fiscal<span style="letter-spacing: 2.7pt;"> </span>Incentives<span style="letter-spacing: 2.6pt;"> </span>and<span style="letter-spacing: 2.3pt;"> </span>Tax<span style="letter-spacing: 2.3pt;"> </span>Concession.<span style="letter-spacing: .5pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: -.05pt;">Incentive</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;">s<span style="letter-spacing: 2.5pt;"> </span>and<span style="letter-spacing: 2.6pt;"> </span>tax<span style="letter-spacing: 2.6pt;"> </span>concessions<span style="mso-spacerun: yes;"> </span><span style="mso-font-width: 101%;">being </span>provided by the government to various types of industrial units like relaxation of security margin,<span style="letter-spacing: 2.65pt;"> </span>15%<span style="letter-spacing: 1.8pt;"> </span>subsidy<span style="letter-spacing: 2.25pt;"> </span>by<span style="letter-spacing: 1.5pt;"> </span>the<span style="letter-spacing: 1.75pt;"> </span>Government, <span style="letter-spacing: .7pt;"><span style="mso-spacerun: yes;"> </span></span>of<span style="letter-spacing: 1.45pt;"> </span>repayment <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>period<span style="letter-spacing: 2.4pt;"> </span>extension<span style="mso-spacerun: yes;"> </span>beyond<span style="letter-spacing: 2.2pt;"> </span><span style="mso-font-width: 103%;">10 </span>years, <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>gestation <span style="letter-spacing: .75pt;"><span style="mso-spacerun: yes;"> </span></span>period <span style="letter-spacing: .5pt;"><span style="mso-spacerun: yes;"> </span></span>2<span style="mso-spacerun: yes;"> </span>years, <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>reduction <span style="letter-spacing: .8pt;"><span style="mso-spacerun: yes;"> </span></span>in <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>application <span style="letter-spacing: 2.0pt;"><span style="mso-spacerun: yes;"> </span></span>to <span style="letter-spacing: 1.0pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: 1.1pt;"><span style="mso-spacerun: yes;"> </span></span>extent <span style="letter-spacing: 1.2pt;"><span style="mso-spacerun: yes;"> </span></span>of <span style="letter-spacing: 1.05pt;"><span style="mso-spacerun: yes;"> </span></span>50% <span style="letter-spacing: 1.15pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 101%;">in </span>application <span style="letter-spacing: 1.8pt;"><span style="mso-spacerun: yes;"> </span></span>is<span style="mso-spacerun: yes;"> </span>made <span style="letter-spacing: .7pt;"><span style="mso-spacerun: yes;"> </span></span>for <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>promotion <span style="letter-spacing: 1.7pt;"><span style="mso-spacerun: yes;"> </span></span>in <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>background <span style="letter-spacing: 1.95pt;"><span style="mso-spacerun: yes;"> </span></span>areas <span style="letter-spacing: .65pt;"><span style="mso-spacerun: yes;"> </span></span>also <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>affect <span style="letter-spacing: .75pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 104%;">capital </span><span style="letter-spacing: -.05pt;">structure.</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.15pt; margin-top: .1pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">(19</span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">)<span style="mso-tab-count: 1;"> </span>Advice<span style="letter-spacing: .7pt;"> </span>given<span style="letter-spacing: .7pt;"> </span>by<span style="letter-spacing: .7pt;"> </span>Financing<span style="letter-spacing: .7pt;"> </span>Agencies. </span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Such<span style="letter-spacing: .35pt;"> </span>agencies<span style="letter-spacing: .35pt;"> </span>are<span style="letter-spacing: .35pt;"> </span>specialised<span style="letter-spacing: .35pt;"> </span>in<span style="letter-spacing: .35pt;"> </span>tendering expert<span style="letter-spacing: .55pt;"> </span>financial<span style="letter-spacing: .55pt;"> </span>advice<span style="letter-spacing: .55pt;"> </span>concerning<span style="letter-spacing: .55pt;"> </span>the<span style="letter-spacing: .55pt;"> </span>capital<span style="letter-spacing: .55pt;"> </span>structure<span style="letter-spacing: .5pt;"> </span>of<span style="letter-spacing: .5pt;"> </span>a<span style="letter-spacing: .5pt;"> </span>firm.<span style="letter-spacing: .65pt;"> </span>Their<span style="letter-spacing: .65pt;"> </span>advice<span style="letter-spacing: 1.0pt;"> </span>should<span style="letter-spacing: .7pt;"> </span><span style="mso-font-width: 101%;">be</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 111.7pt; margin-top: .35pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">given<span style="letter-spacing: -.1pt;"> </span>due<span style="letter-spacing: -.1pt;"> </span>weight<span style="letter-spacing: -.05pt;"> </span>and<span style="letter-spacing: -.1pt;"> </span>consideration<span style="letter-spacing: -.05pt;"> </span>in<span style="letter-spacing: -.1pt;"> </span>financial<span style="letter-spacing: -.1pt;"> </span>plan<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>concern.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 1.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.35pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Thus,<span style="letter-spacing: 2.8pt;"> </span>we<span style="letter-spacing: 2.3pt;"> </span>see,<span style="letter-spacing: 2.45pt;"> </span>the<span style="letter-spacing: 2.3pt;"> </span>determination <span style="letter-spacing: 1.4pt;"><span style="mso-spacerun: yes;"> </span></span>of<span style="letter-spacing: 2.1pt;"> </span>a<span style="letter-spacing: 1.95pt;"> </span>suitable <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>pattern <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>of<span style="letter-spacing: 2.1pt;"> </span>capital<span style="mso-spacerun: yes;"> </span>structure <span style="letter-spacing: .4pt;"><span style="mso-spacerun: yes;"> </span></span>requires <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 104%;">a </span>thorough<span style="letter-spacing: 1.95pt;"> </span>consideration<span style="letter-spacing: 2.6pt;"> </span>of<span style="letter-spacing: .95pt;"> </span>a<span style="letter-spacing: .8pt;"> </span>large<span style="letter-spacing: 1.35pt;"> </span>number<span style="letter-spacing: 1.75pt;"> </span>of<span style="letter-spacing: .95pt;"> </span>factors.<span style="letter-spacing: 1.7pt;"> </span>There<span style="letter-spacing: 1.5pt;"> </span>can be<span style="letter-spacing: 1.75pt;"> </span>no<span style="letter-spacing: 1.75pt;"> </span>ideal<span style="letter-spacing: 1.9pt;"> </span>pattern<span style="letter-spacing: 2.0pt;"> </span><span style="mso-font-width: 101%;">of </span>capital structure for all companies even in the same industry. So each company has to be studied<span style="letter-spacing: -.2pt;"> </span>as<span style="letter-spacing: -.2pt;"> </span>an<span style="letter-spacing: -.2pt;"> </span>individual<span style="letter-spacing: -.2pt;"> </span>case.<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-5548224899000338582011-06-20T01:57:00.000-07:002011-06-20T01:57:05.482-07:00The Finance Director of Ritoria Ltd thinks that the project with the higher NPV should be chosen whereas its Managing Director thinks that the one with the higher IRR should be undertaken, especially as both projects have the same initial outlay and length of life. The company anticipates a cost of capital of 10% and the net<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 41.0pt; margin-right: 5.15pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none; text-indent: -.5in;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">The<span style="letter-spacing: 1.2pt;"> </span>Finance<span style="letter-spacing: 1.2pt;"> </span>Director<span style="letter-spacing: 1.2pt;"> </span>of<span style="letter-spacing: 1.2pt;"> </span>Ritoria<span style="letter-spacing: 1.2pt;"> </span>Ltd<span style="letter-spacing: 1.2pt;"> </span>thinks<span style="letter-spacing: 1.2pt;"> </span>that<span style="letter-spacing: 1.2pt;"> </span>the<span style="letter-spacing: 1.2pt;"> </span>project<span style="letter-spacing: 1.2pt;"> </span>with<span style="letter-spacing: 1.2pt;"> </span>the<span style="letter-spacing: 1.2pt;"> </span>higher NPV<span style="letter-spacing: 1.55pt;"> </span>should<span style="letter-spacing: 1.55pt;"> </span>be<span style="letter-spacing: 1.05pt;"> </span>chosen<span style="letter-spacing: 1.75pt;"> </span>whereas<span style="letter-spacing: 1.9pt;"> </span>its<span style="letter-spacing: 1.4pt;"> </span>Managing<span style="letter-spacing: 2.1pt;"> </span>Director<span style="letter-spacing: 2.35pt;"> </span>thinks<span style="letter-spacing: 1.7pt;"> </span>that<span style="letter-spacing: 1.45pt;"> </span>the<span style="letter-spacing: 1.35pt;"> </span><span style="mso-font-width: 102%;">one </span>with the higher IRR should be undertaken, especially as both projects have the same initial outlay and length of life. The company anticipates a cost of capital<span style="letter-spacing: -.15pt;"> </span>of<span style="letter-spacing: -.15pt;"> </span>10%<span style="letter-spacing: -.15pt;"> </span>and<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.15pt;"> </span>net<span style="letter-spacing: -.15pt;"> </span>after<span style="letter-spacing: -.15pt;"> </span>tax</span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 7.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">cash<span style="letter-spacing: -.1pt;"> </span>flows<span style="letter-spacing: -.1pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>projects<span style="letter-spacing: -.1pt;"> </span>are<span style="letter-spacing: -.1pt;"> </span>as<span style="letter-spacing: -.1pt;"> </span>follows:<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 11.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .2pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 11.0pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 14.25pt; mso-yfti-irow: 0;"> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .35pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 151.9pt;" valign="top" width="203"> <div class="MsoNormal" style="line-height: 12.9pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Year<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .35pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 74.6pt;" valign="top" width="99"> <div align="center" class="MsoNormal" style="line-height: 12.9pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 26.2pt; margin-right: 38.6pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">0<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .35pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 49.5pt;" valign="top" width="66"> <div align="center" class="MsoNormal" style="line-height: 12.9pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 23.6pt; margin-right: 16.1pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">1<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .35pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 12.9pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .35pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 12.9pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">3<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .35pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 12.9pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">4<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .35pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 48.0pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: 12.9pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">5<o:p></o:p></span></div></td> </tr>
<tr style="height: 13.05pt; mso-yfti-irow: 1;"> <td style="border: none; height: 13.05pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 151.9pt;" valign="top" width="203"> <div class="MsoNormal" style="line-height: 12.15pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(Cash<span style="letter-spacing: -.2pt;"> </span>Flows<span style="letter-spacing: -.2pt;"> </span>figs<span style="letter-spacing: -.2pt;"> </span>000)<o:p></o:p></span></div></td> <td style="border: none; height: 13.05pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 74.6pt;" valign="top" width="99"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border: none; height: 13.05pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 49.5pt;" valign="top" width="66"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border: none; height: 13.05pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border: none; height: 13.05pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border: none; height: 13.05pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border: none; height: 13.05pt; mso-border-top-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 48.0pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 13.9pt; mso-yfti-irow: 2;"> <td style="height: 13.9pt; padding: 0in 0in 0in 0in; width: 151.9pt;" valign="top" width="203"> <div class="MsoNormal" style="line-height: 13.4pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Project<span style="letter-spacing: .1pt;"> </span>X<o:p></o:p></span></div></td> <td style="height: 13.9pt; padding: 0in 0in 0in 0in; width: 74.6pt;" valign="top" width="99"> <div class="MsoNormal" style="line-height: 13.4pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.15pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Rs.<span style="letter-spacing: -.75pt;"> </span><span style="letter-spacing: .05pt;">(200)</span><o:p></o:p></span></div></td> <td style="height: 13.9pt; padding: 0in 0in 0in 0in; width: 49.5pt;" valign="top" width="66"> <div class="MsoNormal" style="line-height: 13.4pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">35<o:p></o:p></span></div></td> <td style="height: 13.9pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 13.4pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">80<o:p></o:p></span></div></td> <td style="height: 13.9pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 13.4pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">90<o:p></o:p></span></div></td> <td style="height: 13.9pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 13.4pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">75<o:p></o:p></span></div></td> <td style="height: 13.9pt; padding: 0in 0in 0in 0in; width: 48.0pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: 13.4pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">20<o:p></o:p></span></div></td> </tr>
<tr style="height: 15.85pt; mso-yfti-irow: 3; mso-yfti-lastrow: yes;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.85pt; mso-border-bottom-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 151.9pt;" valign="top" width="203"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Project<span style="letter-spacing: .1pt;"> </span>Y<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.85pt; mso-border-bottom-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 74.6pt;" valign="top" width="99"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Rs.<span style="letter-spacing: .05pt;"> </span>(200)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.85pt; mso-border-bottom-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 49.5pt;" valign="top" width="66"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 19.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">218<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.85pt; mso-border-bottom-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">10<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.85pt; mso-border-bottom-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">10<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.85pt; mso-border-bottom-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div align="center" class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 16.1pt; margin-right: 10.1pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">4<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.85pt; mso-border-bottom-alt: solid black .35pt; padding: 0in 0in 0in 0in; width: 48.0pt;" valign="top" width="64"> <div align="center" class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 16.1pt; margin-right: 22.1pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">3<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: 9.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .3pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
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<tr> <td height="42" style="vertical-align: top;" width="586"><!--[endif]--><!--[if !mso]--><span style="left: 0pt; mso-ignore: vglayout; position: absolute; z-index: -1;"> <table cellpadding="0" cellspacing="0"><tbody>
<tr> <td><!--[endif]--> <div class="shape" style="padding: 0pt 0pt 0pt 0pt;" v:shape="_x0000_s1107"> <table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: .15pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 27.75pt; mso-yfti-irow: 0; mso-yfti-lastrow: yes;"> <td style="border: solid black 1.0pt; height: 27.75pt; mso-border-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.25pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .5pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Factor</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 27.75pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.25pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .5pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Factor</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 27.75pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 53.25pt;" valign="top" width="71"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 7.65pt; margin-right: 4.65pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: -.05pt; mso-font-width: 99%;">Project</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 22.05pt; margin-right: 19.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 95%;">X</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 27.75pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.5pt;" valign="top" width="78"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 20.55pt; margin-right: 19.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 94%;">PV</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 16.05pt; margin-right: 14.55pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">10%</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 27.75pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.75pt;" valign="top" width="77"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 19.8pt; margin-right: 19.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 94%;">PV</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 15.3pt; margin-right: 14.55pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">20%</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 27.75pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.25pt;" valign="top" width="67"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.4pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: -.05pt; mso-font-width: 99%;">Project</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 19.8pt; margin-right: 18.3pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 95%;">Y</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 27.75pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.75pt;" valign="top" width="77"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 19.8pt; margin-right: 19.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 94%;">PV</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 15.3pt; margin-right: 14.55pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">10%</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 27.75pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.75pt;" valign="top" width="77"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 19.8pt; margin-right: 19.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; mso-font-width: 94%;">PV</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 15.3pt; margin-right: 14.55pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">20%</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
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</div></div><!--[if !mso]--></td> </tr>
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</tbody></table><!--[endif]--><span style="font-family: "Times New Roman"; font-size: 12.0pt;">b.<span style="mso-spacerun: yes;"> </span>State,<span style="letter-spacing: 2.45pt;"> </span>with<span style="letter-spacing: 2.3pt;"> </span>reasons,<span style="letter-spacing: 2.8pt;"> </span>which<span style="letter-spacing: 2.55pt;"> </span>of<span style="letter-spacing: 1.95pt;"> </span>the<span style="letter-spacing: 2.1pt;"> </span>two<span style="letter-spacing: 2.2pt;"> </span>mutually<span style="letter-spacing: 2.95pt;"> </span>exclusive<span style="mso-spacerun: yes;"> </span>projects<span style="letter-spacing: 2.8pt;"> </span>you<span style="letter-spacing: 2.2pt;"> </span><span style="mso-font-width: 103%;">would </span><span style="letter-spacing: -.05pt;">recommend.</span><o:p></o:p></span><br />
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</div><div class="MsoNormal" style="line-height: 15.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 5.75pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 18.45pt; mso-yfti-irow: 0;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 18.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.75pt;" valign="top" width="61"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 14.25pt; margin-right: 0in; margin-top: 3.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">10%<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 18.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.6pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 18.75pt; margin-right: 0in; margin-top: 3.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">20%<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 18.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 51.8pt;" valign="top" width="69"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 22.15pt; margin-right: 0in; margin-top: 3.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 18.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 60.7pt;" valign="top" width="81"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.9pt; margin-right: 0in; margin-top: 3.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 18.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.75pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 22.9pt; margin-right: 0in; margin-top: 3.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 18.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.05pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 19.15pt; margin-right: 0in; margin-top: 3.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 18.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.95pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.15pt; margin-right: 0in; margin-top: 3.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 18.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.65pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 22.9pt; margin-right: 0in; margin-top: 3.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 1;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.75pt;" valign="top" width="61"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">1.000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.6pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">1.000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 51.8pt;" valign="top" width="69"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.15pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(200)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 60.7pt;" valign="top" width="81"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(200.00)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.75pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(200.00)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.05pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(200)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.95pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(200.00)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.65pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(200.00)<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 2;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.75pt;" valign="top" width="61"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">0.909<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.6pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">0.833<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 51.8pt;" valign="top" width="69"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.15pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">35<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 60.7pt;" valign="top" width="81"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">31.82<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.75pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">29.16<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.05pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">218<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.95pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">198.16<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.65pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">181.59<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 3;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.75pt;" valign="top" width="61"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">0.826<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.6pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">0.694<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 51.8pt;" valign="top" width="69"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.15pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">80<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 60.7pt;" valign="top" width="81"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">66.08<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.75pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">55.52<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.05pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">10<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.95pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">8.26<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.65pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">6.94<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 4;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.75pt;" valign="top" width="61"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">0.751<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.6pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">0.579<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 51.8pt;" valign="top" width="69"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.15pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">90<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 60.7pt;" valign="top" width="81"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">67.59<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.75pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">52.11<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.05pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">10<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.95pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">7.51<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.65pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">5.79<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 5;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.75pt;" valign="top" width="61"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">0.683<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.6pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">0.482<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 51.8pt;" valign="top" width="69"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.15pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">75<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 60.7pt;" valign="top" width="81"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">51.23<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.75pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">36.15<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.05pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">4<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.95pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2.73<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.65pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">1.93<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 6;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.75pt;" valign="top" width="61"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">0.621<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.6pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">0.402<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 51.8pt;" valign="top" width="69"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.15pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">20<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 60.7pt;" valign="top" width="81"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">12.42<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.75pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">8.04<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.05pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">3<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.95pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">1.86<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.65pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">1.21<o:p></o:p></span></div></td> </tr>
<tr style="height: 15.75pt; mso-yfti-irow: 7; mso-yfti-lastrow: yes;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.75pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.75pt;" valign="top" width="61"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.75pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.6pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.75pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 51.8pt;" valign="top" width="69"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.15pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">NPV<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.5pt; border: none; height: 15.75pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 60.7pt;" valign="top" width="81"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">29.14<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.5pt; border: none; height: 15.75pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.75pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(19.02)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.75pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.05pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">NPV<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.5pt; border: none; height: 15.75pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.95pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">18.52<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.5pt; border: none; height: 15.75pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 59.65pt;" valign="top" width="80"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: -.05pt;">(2.54)</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 277.45pt; margin-top: 1.45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><a href="mailto:@10%25"><span style="color: windowtext; font-size: 12.0pt; text-decoration: none; text-underline: none;">@10%</span></a></span><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: -.15pt;"> </span><span style="font-family: "Times New Roman"; font-size: 12.0pt;">NPV<span style="letter-spacing: -.15pt;"> </span>Project<span style="letter-spacing: -.15pt;"> </span>X<span style="letter-spacing: -.15pt;"> </span>=<span style="letter-spacing: -.15pt;"> </span>£29,140<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 277.45pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><a href="mailto:@10%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">@10%</span></a><span style="letter-spacing: -.15pt;"> </span>NPV<span style="letter-spacing: -.15pt;"> </span>Project<span style="letter-spacing: -.15pt;"> </span>Y<span style="letter-spacing: -.15pt;"> </span>=<span style="letter-spacing: -.15pt;"> </span>£18,520<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 269.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><a href="mailto:@20%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">@20%</span></a><span style="letter-spacing: -.1pt;"> </span>NPV<span style="letter-spacing: -.1pt;"> </span>Project<span style="letter-spacing: -.1pt;"> </span>X<span style="letter-spacing: -.1pt;"> </span>=<span style="letter-spacing: -.1pt;"> </span>(£19,020)<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 274.9pt; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><a href="mailto:@20%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">@20%</span></a><span style="letter-spacing: -.1pt;"> </span>NPV<span style="letter-spacing: -.1pt;"> </span>Project<span style="letter-spacing: -.1pt;"> </span>Y<span style="letter-spacing: -.1pt;"> </span>=<span style="letter-spacing: -.1pt;"> </span>(£2,540) IRR<span style="letter-spacing: -.35pt;"> </span>Project<span style="letter-spacing: -.35pt;"> </span>X=16%<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.4pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 340.45pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">IRR<span style="letter-spacing: -.35pt;"> </span>Project<span style="letter-spacing: -.35pt;"> </span>Y=18%<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 318.7pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(b)<span style="letter-spacing: -.15pt;"> </span>Undertake<span style="letter-spacing: -.15pt;"> </span>Project<span style="letter-spacing: -.15pt;"> </span>X:<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 62.95pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">it has a<span style="letter-spacing: -.05pt;"> </span>positive NPV,<span style="letter-spacing: -.05pt;"> </span>indicating<span style="letter-spacing: -.05pt;"> </span>that<span style="letter-spacing: -.05pt;"> </span>it<span style="letter-spacing: -.05pt;"> </span>exceeds<span style="letter-spacing: -.05pt;"> </span>the company’s cost<span style="letter-spacing: -.05pt;"> </span>of capital;<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 4.2pt; margin-top: .1pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">assuming<span style="letter-spacing: 2.1pt;"> </span>that<span style="letter-spacing: 1.0pt;"> </span>the<span style="letter-spacing: .9pt;"> </span>company’s<span style="letter-spacing: 2.4pt;"> </span>objective<span style="letter-spacing: 2.05pt;"> </span>is<span style="letter-spacing: .6pt;"> </span>to<span style="letter-spacing: .65pt;"> </span>maximise<span style="letter-spacing: 2.15pt;"> </span>the<span style="letter-spacing: .9pt;"> </span>present<span style="letter-spacing: 1.7pt;"> </span>value<span style="letter-spacing: 1.35pt;"> </span>of<span style="letter-spacing: .7pt;"> </span>future<span style="letter-spacing: 1.45pt;"> </span><span style="mso-font-width: 104%;">cash </span>flows<span style="letter-spacing: -.15pt;"> </span>X<span style="letter-spacing: -.15pt;"> </span>offers<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.15pt;"> </span>higher<span style="letter-spacing: -.15pt;"> </span>NPV.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 3.45pt; margin-top: .35pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">X<span style="letter-spacing: .3pt;"> </span>offers<span style="letter-spacing: .3pt;"> </span>a<span style="letter-spacing: .3pt;"> </span>higher<span style="letter-spacing: .3pt;"> </span>NPV,<span style="letter-spacing: .3pt;"> </span>whereas<span style="letter-spacing: .3pt;"> </span>Y<span style="letter-spacing: .3pt;"> </span>offers<span style="letter-spacing: .3pt;"> </span>a<span style="letter-spacing: .3pt;"> </span>high<span style="letter-spacing: .3pt;"> </span>IRR.<span style="letter-spacing: .3pt;"> </span>Where such<span style="letter-spacing: .25pt;"> </span>conflicting<span style="letter-spacing: .55pt;"> </span><span style="mso-font-width: 101%;">indications </span>appear<span style="mso-spacerun: yes;"> </span>it<span style="letter-spacing: 2.0pt;"> </span>is<span style="letter-spacing: 2.05pt;"> </span>generally <span style="letter-spacing: .5pt;"><span style="mso-spacerun: yes;"> </span></span>appropriate <span style="letter-spacing: .9pt;"><span style="mso-spacerun: yes;"> </span></span>to<span style="letter-spacing: 2.1pt;"> </span>accept<span style="letter-spacing: 2.95pt;"> </span>the<span style="letter-spacing: 2.3pt;"> </span>NPV<span style="letter-spacing: 2.7pt;"> </span>result,<span style="letter-spacing: 2.9pt;"> </span>NPV<span style="letter-spacing: 2.7pt;"> </span>being<span style="letter-spacing: 2.8pt;"> </span>regarded <span style="letter-spacing: .4pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 104%;">as </span>technically<span style="letter-spacing: -.1pt;"> </span>more<span style="letter-spacing: -.1pt;"> </span>sound<span style="letter-spacing: -.1pt;"> </span>than<span style="letter-spacing: -.1pt;"> </span>IRR.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 4.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">(c)<span style="letter-spacing: .85pt;"> </span>The<span style="letter-spacing: .85pt;"> </span>two<span style="letter-spacing: .85pt;"> </span>projects<span style="letter-spacing: .85pt;"> </span>have<span style="letter-spacing: .85pt;"> </span>redically<span style="letter-spacing: .85pt;"> </span>different<span style="letter-spacing: .85pt;"> </span>time<span style="letter-spacing: .85pt;"> </span>projiles.<span style="letter-spacing: .85pt;"> </span>X’s<span style="letter-spacing: .85pt;"> </span>cash<span style="letter-spacing: .85pt;"> </span>inflows<span style="letter-spacing: .85pt;"> </span>are<span style="letter-spacing: .85pt;"> </span>grouped in<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>three<span style="letter-spacing: -.1pt;"> </span>middle years of the project. This leads to Y showing a higher IRR.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 4.15pt; margin-top: .75pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Risk,<span style="letter-spacing: .5pt;"> </span>uncertainty<span style="letter-spacing: .5pt;"> </span>and<span style="letter-spacing: .5pt;"> </span>timing<span style="letter-spacing: .5pt;"> </span>of<span style="letter-spacing: .5pt;"> </span>cash<span style="letter-spacing: .5pt;"> </span>flows<span style="letter-spacing: .5pt;"> </span>may<span style="letter-spacing: .5pt;"> </span>be<span style="letter-spacing: .5pt;"> </span>considered<span style="letter-spacing: .5pt;"> </span>by<span style="letter-spacing: .5pt;"> </span>the<span style="letter-spacing: .5pt;"> </span>directors<span style="letter-spacing: .5pt;"> </span>in<span style="letter-spacing: .5pt;"> </span>making the<span style="letter-spacing: -.15pt;"> </span>final<span style="letter-spacing: -.15pt;"> </span>investment<span style="letter-spacing: -.15pt;"> </span>decisions.<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-29389068822767262352011-06-20T01:55:00.000-07:002011-06-20T01:55:19.855-07:00Take a suitable example and explain the impact of cost and volume changes on the profits of a business<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: 102%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 41.0pt; margin-right: 5.65pt; margin-top: 1.45pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-autospace: none; text-indent: -.5in;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 102%;">Take<span style="letter-spacing: .75pt;"> </span>a<span style="letter-spacing: .75pt;"> </span>suitable<span style="letter-spacing: .75pt;"> </span>example<span style="letter-spacing: .75pt;"> </span>and<span style="letter-spacing: .75pt;"> </span>explain<span style="letter-spacing: .75pt;"> </span>the<span style="letter-spacing: .75pt;"> </span>impact<span style="letter-spacing: .75pt;"> </span>of<span style="letter-spacing: .75pt;"> </span>cost<span style="letter-spacing: .75pt;"> </span>and<span style="letter-spacing: .75pt;"> </span>volume<span style="letter-spacing: .75pt;"> </span>changes on<span style="letter-spacing: .2pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>profits<span style="letter-spacing: .2pt;"> </span>of<span style="letter-spacing: .2pt;"> </span>a<span style="letter-spacing: .2pt;"> </span>business.</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 102%;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .9pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Sol<span style="letter-spacing: .3pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">To<span style="letter-spacing: .05pt;"> </span>have<span style="letter-spacing: .35pt;"> </span>a strong<span style="letter-spacing: .2pt;"> </span>and<span style="letter-spacing: .05pt;"> </span>successful<span style="letter-spacing: .4pt;"> </span>business,<span style="letter-spacing: .55pt;"> </span>you<span style="letter-spacing: .35pt;"> </span>need<span style="letter-spacing: .45pt;"> </span>to<span style="letter-spacing: .2pt;"> </span>have<span style="letter-spacing: .45pt;"> </span>a<span style="letter-spacing: .1pt;"> </span>clear<span style="letter-spacing: .45pt;"> </span>understanding<span style="letter-spacing: 1.35pt;"> </span><span style="mso-font-width: 102%;">of </span>the<span style="letter-spacing: -.1pt;"> </span>financial<span style="letter-spacing: -.1pt;"> </span>impact<span style="letter-spacing: -.1pt;"> </span>that<span style="letter-spacing: -.05pt;"> </span>your<span style="letter-spacing: -.1pt;"> </span>most<span style="letter-spacing: -.05pt;"> </span>basic<span style="letter-spacing: -.1pt;"> </span>business<span style="letter-spacing: -.1pt;"> </span>decisions<span style="letter-spacing: -.1pt;"> </span>may<span style="letter-spacing: -.05pt;"> </span>have.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.0pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">For<span style="letter-spacing: .1pt;"> </span>example,<span style="letter-spacing: .4pt;"> </span>do<span style="letter-spacing: .05pt;"> </span>you<span style="letter-spacing: .1pt;"> </span>know </span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">what<span style="letter-spacing: .4pt;"> </span>your<span style="letter-spacing: .4pt;"> </span>most<span style="letter-spacing: .4pt;"> </span>profitable<span style="letter-spacing: 1.1pt;"> </span>products<span style="letter-spacing: .95pt;"> </span>or services<span style="letter-spacing: .9pt;"> </span>are,<span style="letter-spacing: .25pt;"> </span>so<span style="letter-spacing: .05pt;"> </span><span style="mso-font-width: 103%;">that </span>you<span style="letter-spacing: .15pt;"> </span>(or<span style="letter-spacing: .15pt;"> </span>your<span style="letter-spacing: .15pt;"> </span>salespeople)<span style="letter-spacing: .15pt;"> </span>can<span style="letter-spacing: .15pt;"> </span>really<span style="letter-spacing: .15pt;"> </span>push<span style="letter-spacing: .15pt;"> </span>those?<span style="letter-spacing: .15pt;"> </span>Do<span style="letter-spacing: .15pt;"> </span>you know<span style="letter-spacing: .2pt;"> </span>what<span style="letter-spacing: .15pt;"> </span>will<span style="letter-spacing: .15pt;"> </span>happen<span style="letter-spacing: .3pt;"> </span>if <span style="mso-font-width: 101%;">your </span>sales<span style="letter-spacing: 1.6pt;"> </span>volume<span style="letter-spacing: 2.1pt;"> </span>drops?<span style="letter-spacing: 1.95pt;"> </span>How<span style="letter-spacing: 1.6pt;"> </span>far<span style="letter-spacing: 1.2pt;"> </span>can<span style="letter-spacing: 1.3pt;"> </span>it<span style="letter-spacing: .9pt;"> </span>drop<span style="letter-spacing: 1.55pt;"> </span>before<span style="letter-spacing: 1.85pt;"> </span>you<span style="letter-spacing: 1.35pt;"> </span>really<span style="letter-spacing: 1.75pt;"> </span>start<span style="letter-spacing: 1.45pt;"> </span>to<span style="letter-spacing: 1.0pt;"> </span>eat<span style="letter-spacing: 1.2pt;"> </span>red<span style="letter-spacing: 1.25pt;"> </span>ink?<span style="letter-spacing: 1.45pt;"> </span>If<span style="letter-spacing: .95pt;"> </span><span style="mso-font-width: 104%;">you </span>lower your prices in order to sell more, how much more will you have to sell? If you take out a loan and your fixed costs rise because of<span style="letter-spacing: .2pt;"> </span>the<span style="letter-spacing: .25pt;"> </span>interest<span style="letter-spacing: .25pt;"> </span>on<span style="letter-spacing: .2pt;"> </span>the<span style="letter-spacing: .25pt;"> </span>loan,<span style="letter-spacing: .25pt;"> </span>what<span style="letter-spacing: .25pt;"> </span>sales<span style="letter-spacing: .25pt;"> </span>volume will<span style="letter-spacing: -.15pt;"> </span>you<span style="letter-spacing: -.15pt;"> </span>need<span style="letter-spacing: -.15pt;"> </span>to<span style="letter-spacing: -.15pt;"> </span>cover<span style="letter-spacing: -.15pt;"> </span>those<span style="letter-spacing: -.15pt;"> </span>increased<span style="letter-spacing: -.15pt;"> </span>costs?<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 1.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.8pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Cost/volume/profit<span style="letter-spacing: 2.55pt;"> </span>analysis<span style="letter-spacing: 2.0pt;"> </span>can<span style="letter-spacing: 1.8pt;"> </span>help<span style="letter-spacing: 2.5pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">you<span style="letter-spacing: 2.75pt;"> </span>answer <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>these,<span style="letter-spacing: 2.95pt;"> </span>and<span style="letter-spacing: 2.75pt;"> </span>many<span style="letter-spacing: 2.95pt;"> </span>more,<span style="letter-spacing: 2.95pt;"> </span><span style="mso-font-width: 102%;">questions </span>about<span style="letter-spacing: 1.95pt;"> </span>your<span style="letter-spacing: 1.75pt;"> </span>business<span style="letter-spacing: 2.5pt;"> </span>operations.<span style="mso-spacerun: yes;"> </span>CVP<span style="letter-spacing: 1.8pt;"> </span>analysis,<span style="letter-spacing: 2.55pt;"> </span>as<span style="letter-spacing: 1.3pt;"> </span>it<span style="letter-spacing: 1.15pt;"> </span>is<span style="letter-spacing: 1.2pt;"> </span>sometimes<span style="letter-spacing: 2.95pt;"> </span>known,<span style="letter-spacing: 2.3pt;"> </span>is<span style="letter-spacing: 1.2pt;"> </span>a<span style="letter-spacing: 1.1pt;"> </span>way<span style="letter-spacing: 1.7pt;"> </span><span style="mso-font-width: 104%;">of </span>examining the<span style="letter-spacing: .05pt;"> </span>relationship<span style="letter-spacing: .05pt;"> </span>between<span style="letter-spacing: .05pt;"> </span>your<span style="letter-spacing: .05pt;"> </span>fixed<span style="letter-spacing: .05pt;"> </span>and<span style="letter-spacing: .05pt;"> </span>variable<span style="letter-spacing: .05pt;"> </span>costs,<span style="letter-spacing: .05pt;"> </span>your<span style="letter-spacing: .05pt;"> </span>volume<span style="letter-spacing: .05pt;"> </span>(in<span style="letter-spacing: .05pt;"> </span>terms of<span style="letter-spacing: -.1pt;"> </span>units<span style="letter-spacing: -.1pt;"> </span>or<span style="letter-spacing: -.1pt;"> </span>in<span style="letter-spacing: -.1pt;"> </span>terms<span style="letter-spacing: -.1pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>dollars),<span style="letter-spacing: -.1pt;"> </span>and<span style="letter-spacing: -.1pt;"> </span>your<span style="letter-spacing: -.1pt;"> </span>profits.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 170.95pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">There<span style="letter-spacing: -.05pt;"> </span>are<span style="letter-spacing: -.05pt;"> </span>three<span style="letter-spacing: -.05pt;"> </span>main<span style="letter-spacing: -.05pt;"> </span>tools<span style="letter-spacing: -.05pt;"> </span>offered<span style="letter-spacing: -.05pt;"> </span>by<span style="letter-spacing: -.05pt;"> </span>CVP<span style="letter-spacing: -.05pt;"> </span>analysis:</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 102%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 44.0pt; margin-right: 4.55pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-autospace: none; text-indent: -.25in;"><span style="font-family: Arial; font-size: 9.5pt; line-height: 102%;">§<span style="mso-tab-count: 1;"> </span></span><b><u><span style="color: #5b97c1; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 102%;">breakeven<span style="letter-spacing: 1.15pt;"> </span>analysis</span></u></b><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 102%;">,<span style="letter-spacing: 1.5pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 102%;">which<span style="letter-spacing: 1.75pt;"> </span>tells<span style="letter-spacing: 1.55pt;"> </span>you<span style="letter-spacing: 1.5pt;"> </span>the<span style="letter-spacing: 1.45pt;"> </span>sales<span style="letter-spacing: 1.6pt;"> </span>volume<span style="letter-spacing: 1.85pt;"> </span>you<span style="letter-spacing: 1.5pt;"> </span>need<span style="letter-spacing: 1.6pt;"> </span>to<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: .35pt;">brea</span>k<span style="letter-spacing: -.75pt;"> </span><span style="letter-spacing: .35pt;">even, </span>under<span style="letter-spacing: -.15pt;"> </span>different<span style="letter-spacing: -.15pt;"> </span>price<span style="letter-spacing: -.15pt;"> </span>or<span style="letter-spacing: -.15pt;"> </span>cost<span style="letter-spacing: -.15pt;"> </span>scenarios<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.05pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 26.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.5pt;">§<span style="mso-tab-count: 1;"> </span></span><u><span style="color: #5b97c1; font-family: "Times New Roman"; font-size: 12.0pt;">contribution <span style="letter-spacing: 1.2pt;"><span style="mso-spacerun: yes;"> </span></span>margin <span style="letter-spacing: .95pt;"><span style="mso-spacerun: yes;"> </span></span>analysi<span style="letter-spacing: -.1pt;">s</span></span></u><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">, <span style="letter-spacing: 1.9pt;"><span style="mso-spacerun: yes;"> </span></span>which <span style="letter-spacing: 2.05pt;"><span style="mso-spacerun: yes;"> </span></span>compares <span style="letter-spacing: 2.35pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: 1.75pt;"><span style="mso-spacerun: yes;"> </span></span>profitability <span style="letter-spacing: 2.6pt;"><span style="mso-spacerun: yes;"> </span></span>of <span style="letter-spacing: 1.65pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 102%;">different</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 44.0pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">products,<span style="letter-spacing: -.2pt;"> </span>lines,<span style="letter-spacing: -.2pt;"> </span>or<span style="letter-spacing: -.2pt;"> </span>services<span style="letter-spacing: -.2pt;"> </span>you<span style="letter-spacing: -.2pt;"> </span>offer<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 44.0pt; margin-right: 3.95pt; margin-top: .1pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-autospace: none; text-indent: -.25in;"><span style="color: black; font-family: Arial; font-size: 9.5pt;">§<span style="mso-tab-count: 1;"> </span></span><b><u><span style="color: #5b97c1; font-family: "Times New Roman"; font-size: 12.0pt;">operating<span style="letter-spacing: .25pt;"> </span>leverage</span></u></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">,<span style="letter-spacing: .05pt;"> </span>which<span style="letter-spacing: .05pt;"> </span>examines<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>degree<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span>which<span style="letter-spacing: .05pt;"> </span>your<span style="letter-spacing: .05pt;"> </span>business<span style="letter-spacing: .05pt;"> </span>uses<span style="letter-spacing: .05pt;"> </span>fixed <span style="letter-spacing: .35pt;">costs</span>,<span style="letter-spacing: -.8pt;"> </span><span style="letter-spacing: .35pt;">wh</span>ich<span style="letter-spacing: 1.65pt;"> </span>magnifies<span style="letter-spacing: 2.6pt;"> </span>your<span style="letter-spacing: 1.85pt;"> </span>profits<span style="letter-spacing: 2.15pt;"> </span>as<span style="letter-spacing: 1.5pt;"> </span>sales<span style="letter-spacing: 1.9pt;"> </span>increase,<span style="letter-spacing: 2.45pt;"> </span>but<span style="letter-spacing: 1.65pt;"> </span>also<span style="letter-spacing: 1.8pt;"> </span>magnifies<span style="letter-spacing: 2.6pt;"> </span><span style="mso-font-width: 103%;">your</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 44.0pt; margin-right: 0in; margin-top: .35pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">losses<span style="letter-spacing: -.25pt;"> </span>as<span style="letter-spacing: -.25pt;"> </span>sales<span style="letter-spacing: -.25pt;"> </span>drop<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.0pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">Before<span style="letter-spacing: .15pt;"> </span>you can use cost/volume/profit<span style="letter-spacing: 1.1pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">analysis<span style="letter-spacing: 1.05pt;"> </span>to<span style="letter-spacing: .45pt;"> </span>help<span style="letter-spacing: .7pt;"> </span>you<span style="letter-spacing: .65pt;"> </span>evaluate<span style="letter-spacing: 1.1pt;"> </span>your<span style="letter-spacing: .7pt;"> </span><span style="mso-font-width: 102%;">business's </span>operations,<span style="letter-spacing: .65pt;"> </span>you<span style="letter-spacing: .65pt;"> </span>need<span style="letter-spacing: .65pt;"> </span>to<span style="letter-spacing: .65pt;"> </span>get<span style="letter-spacing: .65pt;"> </span>a<span style="letter-spacing: .65pt;"> </span>handle<span style="letter-spacing: .65pt;"> </span>on<span style="letter-spacing: .65pt;"> </span>the<span style="letter-spacing: .65pt;"> </span>fixed<span style="letter-spacing: .65pt;"> </span>costs<span style="letter-spacing: .65pt;"> </span>of<span style="letter-spacing: .65pt;"> </span>your<span style="letter-spacing: .65pt;"> </span>business,<span style="letter-spacing: .65pt;"> </span>as<span style="letter-spacing: .65pt;"> </span>comp<span style="letter-spacing: .45pt;">are</span>d<span style="letter-spacing: -.6pt;"> </span><span style="letter-spacing: .45pt;">to </span>your<span style="letter-spacing: -.3pt;"> </span>variable<span style="letter-spacing: -.3pt;"> </span>costs.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 5.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .35pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.85pt; margin-top: 1.85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">Virtually<span style="letter-spacing: 2.5pt;"> </span>all<span style="letter-spacing: 2.15pt;"> </span>of<span style="letter-spacing: 2.15pt;"> </span>your<span style="letter-spacing: 2.3pt;"> </span>business's </span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">costs<span style="letter-spacing: 1.65pt;"> </span>will<span style="letter-spacing: 1.55pt;"> </span>fall,<span style="letter-spacing: 1.55pt;"> </span>more<span style="letter-spacing: 1.7pt;"> </span>or<span style="letter-spacing: 1.4pt;"> </span>less<span style="letter-spacing: 1.55pt;"> </span>neatly,<span style="letter-spacing: 1.85pt;"> </span>into<span style="letter-spacing: 1.55pt;"> </span>one<span style="letter-spacing: 1.55pt;"> </span>of<span style="letter-spacing: 1.4pt;"> </span><span style="mso-font-width: 102%;">two </span><span style="letter-spacing: -.05pt;">categories:</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 47.75pt; margin-right: 5.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none; text-indent: -.25in;"><span style="color: black; font-family: Arial; font-size: 9.5pt; line-height: 100%;">§ <span style="letter-spacing: .7pt;"><span style="mso-spacerun: yes;"> </span></span></span><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .25pt; line-height: 100%;">"Variabl</span></b><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">e<span style="letter-spacing: -1.0pt;"> </span><span style="letter-spacing: .25pt;">costs,</span>"<span style="letter-spacing: .5pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">which<span style="letter-spacing: 1.75pt;"> </span>increase<span style="letter-spacing: 2.05pt;"> </span>directly<span style="letter-spacing: 1.95pt;"> </span>in<span style="letter-spacing: 1.15pt;"> </span>proportion<span style="letter-spacing: 2.35pt;"> </span>to<span style="letter-spacing: 1.15pt;"> </span>the<span style="letter-spacing: 1.3pt;"> </span>level<span style="letter-spacing: 1.55pt;"> </span>of<span style="letter-spacing: 1.15pt;"> </span>sales<span style="letter-spacing: 1.55pt;"> </span><span style="mso-font-width: 103%;">in </span>dollars or units sold. Depending on your type of<span style="letter-spacing: .2pt;"> </span>business,<span style="letter-spacing: .2pt;"> </span>some<span style="letter-spacing: .2pt;"> </span>examples<span style="letter-spacing: .2pt;"> </span>would be<span style="letter-spacing: .15pt;"> </span>cost<span style="letter-spacing: .45pt;"> </span>of goods<span style="letter-spacing: .55pt;"> </span>sold,<span style="letter-spacing: .4pt;"> </span>sales<span style="letter-spacing: .65pt;"> </span>commissions,<span style="letter-spacing: 1.65pt;"> </span>shipping<span style="letter-spacing: .95pt;"> </span>charges,<span style="letter-spacing: .9pt;"> </span>delivery<span style="letter-spacing: 1.25pt;"> </span><span style="mso-font-width: 103%;">charges, </span>costs<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>direct<span style="letter-spacing: -.05pt;"> </span>materials<span style="letter-spacing: -.05pt;"> </span>or<span style="letter-spacing: -.05pt;"> </span>supplies,<span style="letter-spacing: -.05pt;"> </span>wages<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>part<span style="letter-spacing: .5pt;">-</span>time<span style="letter-spacing: .5pt;"> </span>or<span style="letter-spacing: .5pt;"> </span>temporary<span style="letter-spacing: .5pt;"> </span>employees, and<span style="letter-spacing: -.1pt;"> </span>sales<span style="letter-spacing: -.05pt;"> </span>or<span style="letter-spacing: -.1pt;"> </span>production<span style="letter-spacing: -.1pt;"> </span>bonuses.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.4pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 29.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.5pt;">§ <span style="letter-spacing: .7pt;"><span style="mso-spacerun: yes;"> </span></span></span><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .65pt;">"Fixe</span></b><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">d<span style="letter-spacing: -.15pt;"> </span><span style="letter-spacing: .65pt;">costs,</span>"<span style="letter-spacing: 1.3pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">which <span style="letter-spacing: 1.2pt;"><span style="mso-spacerun: yes;"> </span></span>remain <span style="letter-spacing: 1.2pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: 1.35pt;"><span style="mso-spacerun: yes;"> </span></span>same <span style="letter-spacing: 1.9pt;"><span style="mso-spacerun: yes;"> </span></span>regardless <span style="letter-spacing: 2.35pt;"><span style="mso-spacerun: yes;"> </span></span>of <span style="letter-spacing: 1.6pt;"><span style="mso-spacerun: yes;"> </span></span>your <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>level <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>of <span style="letter-spacing: 1.6pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 102%;">sales.</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 47.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">Depending <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>on<span style="letter-spacing: 2.0pt;"> </span>your<span style="letter-spacing: 2.3pt;"> </span>type<span style="letter-spacing: 2.25pt;"> </span>of<span style="letter-spacing: 1.95pt;"> </span>business,<span style="letter-spacing: 2.95pt;"> </span>some<span style="letter-spacing: 2.4pt;"> </span>typical<span style="letter-spacing: 2.65pt;"> </span>examples<span style="mso-spacerun: yes;"> </span>would<span style="letter-spacing: 2.55pt;"> </span>be<span style="letter-spacing: 2.0pt;"> </span><span style="mso-font-width: 103%;">rent,</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 47.75pt; margin-right: 5.2pt; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">interest<span style="letter-spacing: .25pt;"> </span>on<span style="letter-spacing: .25pt;"> </span>debt,<span style="letter-spacing: .25pt;"> </span>insurance,<span style="letter-spacing: .25pt;"> </span>plant<span style="letter-spacing: .25pt;"> </span>and<span style="letter-spacing: .25pt;"> </span>equipment<span style="letter-spacing: .25pt;"> </span>expenses,<span style="letter-spacing: .25pt;"> </span>business<span style="letter-spacing: .25pt;"> </span>licenses,<span style="letter-spacing: .25pt;"> </span>and salary<span style="letter-spacing: -.3pt;"> </span>of<span style="letter-spacing: -.3pt;"> </span>permanent<span style="letter-spacing: -.3pt;"> </span>full<span style="letter-spacing: .5pt;">-</span>time workers.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 101%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.4pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 101%;">Your<span style="letter-spacing: .6pt;"> </span>accountant<span style="letter-spacing: .9pt;"> </span>can<span style="letter-spacing: .55pt;"> </span>h<span style="letter-spacing: .4pt;">el</span>p<span style="letter-spacing: -.6pt;"> </span><span style="letter-spacing: .4pt;">yo</span>u<span style="letter-spacing: .85pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 101%;">determine<span style="letter-spacing: 1.4pt;"> </span>which<span style="letter-spacing: 1.05pt;"> </span>of<span style="letter-spacing: .65pt;"> </span>your<span style="letter-spacing: .9pt;"> </span>costs<span style="letter-spacing: .95pt;"> </span>are<span style="letter-spacing: .75pt;"> </span>fixed<span style="letter-spacing: .95pt;"> </span>and<span style="letter-spacing: .8pt;"> </span>which<span style="letter-spacing: 1.05pt;"> </span><span style="mso-font-width: 102%;">are </span>variable, <span style="letter-spacing: 1.35pt;"><span style="mso-spacerun: yes;"> </span></span>but <span style="letter-spacing: .3pt;"><span style="mso-spacerun: yes;"> </span></span>here <span style="letter-spacing: .5pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>key <span style="letter-spacing: .35pt;"><span style="mso-spacerun: yes;"> </span></span>word <span style="letter-spacing: .65pt;"><span style="mso-spacerun: yes;"> </span></span>is<span style="mso-spacerun: yes;"> </span>"help." <span style="letter-spacing: 1.0pt;"><span style="mso-spacerun: yes;"> </span></span>In <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>order <span style="letter-spacing: .7pt;"><span style="mso-spacerun: yes;"> </span></span>to <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>be <span style="letter-spacing: .15pt;"><span style="mso-spacerun: yes;"> </span></span>accurate, <span style="letter-spacing: 1.4pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 104%;">ultimate </span>classification<span style="letter-spacing: 2.15pt;"> </span>has<span style="letter-spacing: .25pt;"> </span>to be<span style="letter-spacing: .1pt;"> </span>done<span style="letter-spacing: .55pt;"> </span>by<span style="letter-spacing: .1pt;"> </span>someone<span style="letter-spacing: 1.35pt;"> </span>who's<span style="letter-spacing: .75pt;"> </span>intimately<span style="letter-spacing: 1.55pt;"> </span>familiar<span style="letter-spacing: 1.15pt;"> </span>with<span style="letter-spacing: .5pt;"> </span>your<span style="letter-spacing: .5pt;"> </span><span style="mso-font-width: 104%;">business </span><span style="letter-spacing: -.05pt;">operation</span>s<span style="letter-spacing: -.1pt;"> </span>— which probably<span style="letter-spacing: .05pt;"> </span>means<span style="letter-spacing: .05pt;"> </span>you.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .75pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.45pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .2pt;">Combinatio</span></b><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">n<span style="letter-spacing: -1.05pt;"> </span><span style="letter-spacing: .2pt;">costs</span>.<span style="letter-spacing: 2.7pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">Some <span style="letter-spacing: .3pt;"><span style="mso-spacerun: yes;"> </span></span>costs <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>are<span style="letter-spacing: 2.95pt;"> </span>a<span style="letter-spacing: 2.65pt;"> </span>combination <span style="letter-spacing: 1.3pt;"><span style="mso-spacerun: yes;"> </span></span>of<span style="letter-spacing: 2.8pt;"> </span>fixed <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>and<span style="mso-spacerun: yes;"> </span>variable: <span style="letter-spacing: .75pt;"><span style="mso-spacerun: yes;"> </span></span>a<span style="letter-spacing: 2.65pt;"> </span><span style="mso-font-width: 103%;">certain </span>minimum level will be incurred regardless of your sales levels, but the costs rise as your volume<span style="letter-spacing: 2.65pt;"> </span>increases.<span style="letter-spacing: 2.95pt;"> </span>As<span style="letter-spacing: 1.95pt;"> </span>an<span style="letter-spacing: 1.9pt;"> </span>analogy,<span style="letter-spacing: 2.8pt;"> </span>think<span style="letter-spacing: 2.3pt;"> </span>about<span style="letter-spacing: 2.35pt;"> </span>your<span style="letter-spacing: 2.2pt;"> </span>phone<span style="letter-spacing: 2.45pt;"> </span>bill:<span style="letter-spacing: 2.15pt;"> </span>you<span style="letter-spacing: 2.1pt;"> </span>proba<span style="letter-spacing: -.55pt;">b</span>ly <span style="letter-spacing: .65pt;"><span style="mso-spacerun: yes;"> </span></span>pay<span style="letter-spacing: 2.65pt;"> </span>an access<span style="letter-spacing: 1.0pt;"> </span>or<span style="letter-spacing: .2pt;"> </span>line<span style="letter-spacing: .5pt;"> </span>charge<span style="letter-spacing: 1.05pt;"> </span>that<span style="letter-spacing: .5pt;"> </span>is<span style="letter-spacing: .1pt;"> </span>the<span style="letter-spacing: .35pt;"> </span>same<span style="letter-spacing: .75pt;"> </span>each<span style="letter-spacing: .65pt;"> </span>month,<span style="letter-spacing: 1.15pt;"> </span>and<span style="letter-spacing: .5pt;"> </span>you<span style="letter-spacing: .5pt;"> </span>probably<span style="letter-spacing: 1.5pt;"> </span>also<span style="letter-spacing: .55pt;"> </span>pay<span style="letter-spacing: .5pt;"> </span>a <span style="mso-font-width: 104%;">charge </span>based on the volume of calls you make. Strictly speaking, these costs should be separated into<span style="letter-spacing: .25pt;"> </span>their<span style="letter-spacing: .25pt;"> </span>fixed<span style="letter-spacing: .25pt;"> </span>and<span style="letter-spacing: .25pt;"> </span>variable<span style="letter-spacing: .25pt;"> </span>components,<span style="letter-spacing: .25pt;"> </span>but<span style="letter-spacing: .25pt;"> </span>that<span style="letter-spacing: .25pt;"> </span>may<span style="letter-spacing: .25pt;"> </span>be<span style="letter-spacing: .25pt;"> </span>more<span style="letter-spacing: .25pt;"> </span>trouble<span style="letter-spacing: .45pt;"> </span>than<span style="letter-spacing: .65pt;"> </span>it's<span style="letter-spacing: .6pt;"> </span>worth<span style="letter-spacing: .75pt;"> </span><span style="mso-font-width: 101%;">for </span>a small business. To simplify things, just decide which type of cost (fixed or variable) is the most important for the particular item, and then classify the whole item according to the<span style="letter-spacing: 2.8pt;"> </span>more<span style="letter-spacing: 3.0pt;"> </span>important <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>characteristic. <span style="letter-spacing: .85pt;"><span style="mso-spacerun: yes;"> </span></span>For<span style="letter-spacing: 2.85pt;"> </span>example, <span style="letter-spacing: .35pt;"><span style="mso-spacerun: yes;"> </span></span>in<span style="letter-spacing: 2.7pt;"> </span>a<span style="letter-spacing: -.3pt;"> </span>telemarketing <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>business,<span style="letter-spacing: 2.9pt;"> </span>if<span style="letter-spacing: 2.5pt;"> </span><span style="mso-font-width: 101%;">your </span>phone<span style="letter-spacing: .6pt;"> </span>call<span style="letter-spacing: .1pt;"> </span>volume<span style="letter-spacing: .85pt;"> </span>charges<span style="letter-spacing: .9pt;"> </span>are normally<span style="letter-spacing: 1.15pt;"> </span>greater<span style="letter-spacing: .75pt;"> </span>than<span style="letter-spacing: .25pt;"> </span>your<span style="letter-spacing: .3pt;"> </span>line<span style="letter-spacing: .15pt;"> </span>access<span style="letter-spacing: .65pt;"> </span>charges,<span style="letter-spacing: 1.0pt;"> </span><span style="mso-font-width: 104%;">you'd </span>classify<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.15pt;"> </span>entire<span style="letter-spacing: -.15pt;"> </span>bill<span style="letter-spacing: -.15pt;"> </span>as<span style="letter-spacing: -.15pt;"> </span>variable.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.3pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Relevant<span style="letter-spacing: 1.75pt;"> </span>range<span style="letter-spacing: 1.6pt;"> </span>of<span style="letter-spacing: 1.4pt;"> </span>activity.<span style="letter-spacing: 1.9pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">It's<span style="letter-spacing: 2.05pt;"> </span>important<span style="mso-spacerun: yes;"> </span>to<span style="letter-spacing: 1.9pt;"> </span>realize<span style="letter-spacing: 2.55pt;"> </span>that<span style="letter-spacing: 2.15pt;"> </span>fixed<span style="letter-spacing: 2.35pt;"> </span>costs<span style="letter-spacing: 2.3pt;"> </span>are<span style="letter-spacing: 2.05pt;"> </span>"fixed"<span style="letter-spacing: 2.65pt;"> </span><span style="mso-font-width: 103%;">only </span>within<span style="letter-spacing: .15pt;"> </span>a<span style="letter-spacing: .15pt;"> </span>certain<span style="letter-spacing: .55pt;"> </span>range<span style="letter-spacing: .55pt;"> </span>of<span style="letter-spacing: .55pt;"> </span>activity<span style="letter-spacing: .55pt;"> </span>or<span style="letter-spacing: .55pt;"> </span>over<span style="letter-spacing: .55pt;"> </span>a<span style="letter-spacing: .55pt;"> </span>certain<span style="letter-spacing: .55pt;"> </span>period<span style="letter-spacing: .55pt;"> </span>of<span style="letter-spacing: .55pt;"> </span>time.<span style="letter-spacing: .55pt;"> </span>For<span style="letter-spacing: .55pt;"> </span>example,<span style="letter-spacing: .55pt;"> </span>your<span style="letter-spacing: .55pt;"> </span>rent is<span style="letter-spacing: .15pt;"> </span>a<span style="letter-spacing: .15pt;"> </span>constant<span style="letter-spacing: .5pt;"> </span>amount<span style="letter-spacing: .45pt;"> </span>per<span style="letter-spacing: .25pt;"> </span>month —<span style="letter-spacing: .1pt;"> </span>until<span style="letter-spacing: .55pt;"> </span>your<span style="letter-spacing: .55pt;"> </span>landlord<span style="letter-spacing: .9pt;"> </span>raises<span style="letter-spacing: .65pt;"> </span>it<span style="letter-spacing: .3pt;"> </span>at<span style="letter-spacing: .25pt;"> </span>the<span style="letter-spacing: .4pt;"> </span>end<span style="letter-spacing: .45pt;"> </span>of<span style="letter-spacing: .3pt;"> </span>the<span style="letter-spacing: .4pt;"> </span>year<span style="letter-spacing: .1pt;"> </span>— unless you go out of business completely, in which case it would drop to zero, or unless <span style="letter-spacing: -.05pt;">y</span>our<span style="letter-spacing: -.3pt;"> </span>sales<span style="letter-spacing: .4pt;"> </span>increase<span style="letter-spacing: .4pt;"> </span>to<span style="letter-spacing: .4pt;"> </span>the<span style="letter-spacing: .4pt;"> </span>point<span style="letter-spacing: .4pt;"> </span>where<span style="letter-spacing: .4pt;"> </span>you<span style="letter-spacing: .4pt;"> </span>need<span style="letter-spacing: .4pt;"> </span>to<span style="letter-spacing: .4pt;"> </span>rent<span style="letter-spacing: .4pt;"> </span>an<span style="letter-spacing: .4pt;"> </span>additional<span style="letter-spacing: .4pt;"> </span>workplace,<span style="letter-spacing: .4pt;"> </span>in<span style="letter-spacing: .4pt;"> </span>which case<span style="letter-spacing: 2.5pt;"> </span>it<span style="letter-spacing: 1.95pt;"> </span>might<span style="letter-spacing: 2.8pt;"> </span>double. <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>So<span style="letter-spacing: 2.2pt;"> </span>CVP<span style="letter-spacing: 2.65pt;"> </span>analysis <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>is<span style="letter-spacing: 2.0pt;"> </span>only<span style="letter-spacing: 2.55pt;"> </span>valid<span style="letter-spacing: 2.65pt;"> </span>within<span style="letter-spacing: 2.9pt;"> </span>a<span style="letter-spacing: 1.9pt;"> </span>certain<span style="mso-spacerun: yes;"> </span>range<span style="letter-spacing: 2.75pt;"> </span>of<span style="letter-spacing: 2.1pt;"> </span><span style="mso-font-width: 104%;">sales </span>(generally, <span style="letter-spacing: .35pt;"><span style="mso-spacerun: yes;"> </span></span>this<span style="letter-spacing: 2.0pt;"> </span>coincides <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>with<span style="letter-spacing: 2.15pt;"> </span>the<span style="letter-spacing: 1.9pt;"> </span>range<span style="letter-spacing: 2.35pt;"> </span>that<span style="letter-spacing: 2.0pt;"> </span>could<span style="letter-spacing: 2.35pt;"> </span>reasonably <span style="letter-spacing: .35pt;"><span style="mso-spacerun: yes;"> </span></span>be<span style="letter-spacing: 1.75pt;"> </span>expected<span style="mso-spacerun: yes;"> </span>for<span style="letter-spacing: 1.85pt;"> </span><span style="mso-font-width: 104%;">yo<span style="letter-spacing: -.6pt;">u</span></span>r <span style="letter-spacing: -.05pt;">business</span>)<span style="letter-spacing: .85pt;"> </span>— at<span style="letter-spacing: .25pt;"> </span>the<span style="letter-spacing: .45pt;"> </span>extreme<span style="letter-spacing: 1.15pt;"> </span>high<span style="letter-spacing: .65pt;"> </span>and<span style="letter-spacing: .5pt;"> </span>extreme<span style="letter-spacing: 1.15pt;"> </span>low<span style="letter-spacing: .55pt;"> </span>ends<span style="letter-spacing: .65pt;"> </span>of<span style="letter-spacing: .3pt;"> </span>the<span style="letter-spacing: .45pt;"> </span>range,<span style="letter-spacing: .9pt;"> </span>or<span style="letter-spacing: .3pt;"> </span>if<span style="letter-spacing: .2pt;"> </span>enough<span style="letter-spacing: 1.05pt;"> </span><span style="mso-font-width: 103%;">time </span>passes,<span style="letter-spacing: -.2pt;"> </span>all<span style="letter-spacing: -.2pt;"> </span>costs<span style="letter-spacing: -.2pt;"> </span>become<span style="letter-spacing: -.2pt;"> </span>variable.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 1.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.15pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Cost per unit or job.<span style="letter-spacing: .2pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">If<span style="letter-spacing: .2pt;"> </span>you<span style="letter-spacing: .2pt;"> </span>add<span style="letter-spacing: .2pt;"> </span>up<span style="letter-spacing: .2pt;"> </span>all<span style="letter-spacing: .2pt;"> </span>your<span style="letter-spacing: .2pt;"> </span>variable<span style="letter-spacing: .2pt;"> </span>costs<span style="letter-spacing: .2pt;"> </span>for<span style="letter-spacing: .2pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>accounting<span style="letter-spacing: .2pt;"> </span>period,<span style="letter-spacing: .2pt;"> </span>and divide<span style="letter-spacing: .4pt;"> </span>by<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .1pt;"> </span>number<span style="letter-spacing: .55pt;"> </span>of units<span style="letter-spacing: .25pt;"> </span>sold,<span style="letter-spacing: .25pt;"> </span>you<span style="letter-spacing: .15pt;"> </span>wi<span style="letter-spacing: -.05pt;">l</span>l<span style="letter-spacing: .25pt;"> </span>arrive<span style="letter-spacing: .45pt;"> </span>at<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>cost<span style="letter-spacing: .3pt;"> </span>per<span style="letter-spacing: .2pt;"> </span>unit.<span style="letter-spacing: .35pt;"> </span>This<span style="letter-spacing: .35pt;"> </span>cost<span style="letter-spacing: .3pt;"> </span><span style="mso-font-width: 102%;">should </span>remain<span style="letter-spacing: .05pt;"> </span>constant,<span style="letter-spacing: .05pt;"> </span>regardless of how<span style="letter-spacing: .05pt;"> </span>few or how<span style="letter-spacing: .05pt;"> </span>many units<span style="letter-spacing: .05pt;"> </span>you<span style="letter-spacing: .05pt;"> </span>sell.<span style="letter-spacing: .05pt;"> </span>If yours<span style="letter-spacing: .05pt;"> </span>is a<span style="letter-spacing: .05pt;"> </span>service business,<span style="letter-spacing: .45pt;"> </span>you<span style="letter-spacing: .45pt;"> </span>may<span style="letter-spacing: .45pt;"> </span>be<span style="letter-spacing: .45pt;"> </span>able<span style="letter-spacing: .45pt;"> </span>to<span style="letter-spacing: .45pt;"> </span>divide<span style="letter-spacing: .45pt;"> </span>your<span style="letter-spacing: .45pt;"> </span>variable<span style="letter-spacing: .45pt;"> </span>costs<span style="letter-spacing: .45pt;"> </span>by<span style="letter-spacing: .45pt;"> </span>the<span style="letter-spacing: .45pt;"> </span>number<span style="letter-spacing: .45pt;"> </span>of<span style="letter-spacing: .45pt;"> </span>jobs<span style="letter-spacing: .45pt;"> </span>performed<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.8pt; margin-top: 1.85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">(if<span style="letter-spacing: 1.55pt;"> </span>the<span style="letter-spacing: 1.6pt;"> </span>jobs<span style="letter-spacing: 1.65pt;"> </span>are<span style="letter-spacing: 1.6pt;"> </span>essentially<span style="letter-spacing: 1.95pt;"> </span>s<span style="letter-spacing: -.1pt;">i</span>milar)<span style="letter-spacing: 2.45pt;"> </span>or<span style="letter-spacing: 1.7pt;"> </span>by<span style="letter-spacing: 1.75pt;"> </span>the<span style="letter-spacing: 1.95pt;"> </span>hours<span style="letter-spacing: 2.05pt;"> </span>spent<span style="letter-spacing: 2.25pt;"> </span>on<span style="letter-spacing: 1.75pt;"> </span>all<span style="letter-spacing: 1.85pt;"> </span>jobs<span style="letter-spacing: 2.1pt;"> </span>(if<span style="letter-spacing: 1.85pt;"> </span>the<span style="letter-spacing: 1.95pt;"> </span>jobs<span style="letter-spacing: 2.1pt;"> </span><span style="mso-font-width: 103%;">vary </span>greatly<span style="letter-spacing: -.4pt;"> </span>in<span style="letter-spacing: -.4pt;"> </span>size).<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 14.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .25pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">Once<span style="letter-spacing: .55pt;"> </span>you're<span style="letter-spacing: .55pt;"> </span>comfortable<span style="letter-spacing: .55pt;"> </span>with<span style="letter-spacing: .55pt;"> </span>classifying </span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">costs<span style="letter-spacing: .6pt;"> </span>as<span style="letter-spacing: .3pt;"> </span>fixed<span style="letter-spacing: .6pt;"> </span>or<span style="letter-spacing: .3pt;"> </span>variable,<span style="letter-spacing: .95pt;"> </span>you<span style="letter-spacing: .45pt;"> </span>can<span style="letter-spacing: .45pt;"> </span>apply<span style="letter-spacing: .65pt;"> </span><span style="mso-font-width: 102%;">this </span>knowledge<span style="letter-spacing: -.1pt;"> </span>with<span style="letter-spacing: -.1pt;"> </span>two<span style="letter-spacing: -.1pt;"> </span>techniques:<span style="letter-spacing: -.1pt;"> </span>contribution<span style="letter-spacing: -.1pt;"> </span>margin<span style="letter-spacing: -.1pt;"> </span>analysis<span style="letter-spacing: -.1pt;"> </span>and<span style="letter-spacing: -.1pt;"> </span>breakeven<span style="letter-spacing: -.1pt;"> </span>analysis.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 14.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .6pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.7pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: 1.2pt;">On</span></b><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">e<span style="letter-spacing: .85pt;"> </span><span style="letter-spacing: 1.2pt;">o</span>f<span style="letter-spacing: 2.3pt;"> </span>the <span style="letter-spacing: 1.45pt;"><span style="mso-spacerun: yes;"> </span></span>important, <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>yet <span style="letter-spacing: 1.45pt;"><span style="mso-spacerun: yes;"> </span></span>relatively<span style="letter-spacing: .3pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">simple, <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>tools <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>afforded <span style="letter-spacing: .55pt;"><span style="mso-spacerun: yes;"> </span></span>by<span style="mso-spacerun: yes;"> </span><span style="mso-font-width: 102%;">cost/volume/profit </span>analysis<span style="letter-spacing: 1.1pt;"> </span>is<span style="letter-spacing: 1.1pt;"> </span>known<span style="letter-spacing: 1.1pt;"> </span>as<span style="letter-spacing: 1.1pt;"> </span>contribution<span style="letter-spacing: 1.1pt;"> </span>margin<span style="letter-spacing: 1.1pt;"> </span>analysis.<span style="letter-spacing: 1.1pt;"> </span>Your<span style="letter-spacing: 1.1pt;"> </span>company's<span style="letter-spacing: 1.1pt;"> </span>contribution<span style="letter-spacing: 1.1pt;"> </span>margin is<span style="letter-spacing: 1.25pt;"> </span>simply<span style="letter-spacing: 2.25pt;"> </span>the<span style="letter-spacing: 1.5pt;"> </span>percentage<span style="mso-spacerun: yes;"> </span>of<span style="letter-spacing: 1.3pt;"> </span>each<span style="letter-spacing: 1.8pt;"> </span>sales<span style="letter-spacing: 1.85pt;"> </span>dollar<span style="letter-spacing: 2.05pt;"> </span>that<span style="letter-spacing: 1.65pt;"> </span>remains<span style="letter-spacing: 2.45pt;"> </span>after<span style="letter-spacing: 1.8pt;"> </span>the<span style="letter-spacing: 1.5pt;"> </span>variable<span style="letter-spacing: 2.45pt;"> </span>costs<span style="letter-spacing: 1.9pt;"> </span><span style="mso-font-width: 104%;">are </span>subtracted. When you know the contribution margin, you can make better decisions about whether to add or subtract a product line, about how to price your product or service, and about<span style="letter-spacing: -.1pt;"> </span>how<span style="letter-spacing: -.1pt;"> </span>to<span style="letter-spacing: -.1pt;"> </span>structure<span style="letter-spacing: -.1pt;"> </span>any<span style="letter-spacing: -.1pt;"> </span>sales<span style="letter-spacing: -.1pt;"> </span>commissions<span style="letter-spacing: -.1pt;"> </span>or<span style="letter-spacing: -.1pt;"> </span>bonuses.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 14.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .35pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.95pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">How<span style="letter-spacing: 2.7pt;"> </span>is<span style="letter-spacing: 2.55pt;"> </span>your<span style="letter-spacing: 2.7pt;"> </span>contribution <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>ma<span style="letter-spacing: -.15pt;">r</span><span style="letter-spacing: .55pt;">gi</span>n<span style="letter-spacing: -.15pt;"> </span><span style="letter-spacing: .55pt;">computed</span>?<span style="letter-spacing: 1.1pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">By <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>using <span style="letter-spacing: .15pt;"><span style="mso-spacerun: yes;"> </span></span>a<span style="letter-spacing: 2.95pt;"> </span>special <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>type <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>of<span style="mso-spacerun: yes;"> </span><span style="mso-font-width: 101%;">income </span>statement that has been reformatted to group together your business's fixed and variable <span style="letter-spacing: -.05pt;">costs.</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
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</div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 111.5pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 49.15pt; mso-row-margin-right: .35pt; mso-yfti-irow: 0;"> <td colspan="3" style="border-bottom: #ACA899; border-left: #EBE9D7; border-right: #ACA899; border-style: solid; border-top: #EBE9D7; border-width: 1.0pt; height: 49.15pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #EBE9D7 .75pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div align="center" class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 13.15pt; margin-right: 13.15pt; margin-top: 3.75pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none; text-indent: .75pt;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Beta<span style="letter-spacing: -.5pt;"> </span>Sales<span style="letter-spacing: -.5pt;"> </span>Company Contribution<span style="letter-spacing: -.2pt;"> </span>Format<span style="letter-spacing: -.25pt;"> </span>Income<span style="letter-spacing: -.25pt;"> </span>Statement For<span style="letter-spacing: -.1pt;"> </span>Year<span style="letter-spacing: -.05pt;"> </span>Ended<span style="letter-spacing: -.05pt;"> </span></span><st1:date day="31" month="12" year="200"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">December<span style="letter-spacing: -.1pt;"> </span>31,<span style="letter-spacing: -.05pt;"> </span>200</span></st1:date><span style="font-family: "Times New Roman"; font-size: 12.0pt;">X<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.0pt; mso-row-margin-right: .35pt; mso-yfti-irow: 1;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 3.35pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 135.0pt; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Sales<span style="mso-tab-count: 1;"> </span>$ 462,452<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.0pt; mso-row-margin-right: .35pt; mso-yfti-irow: 2;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 3.35pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Less<span style="letter-spacing: -.55pt;"> </span>Variable<span style="letter-spacing: -.55pt;"> </span>Costs:<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.75pt; mso-row-margin-right: .35pt; mso-yfti-irow: 3;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.75pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 3.35pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 135.0pt; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Cost<span style="letter-spacing: -.2pt;"> </span>of<span style="letter-spacing: -.2pt;"> </span>Goods<span style="letter-spacing: -.2pt;"> </span>Sold<span style="mso-tab-count: 1;"> </span>$ 230,934<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.0pt; mso-row-margin-right: .35pt; mso-yfti-irow: 4;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 3.35pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 141.0pt; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Sales<span style="letter-spacing: -.7pt;"> </span>Commissions<span style="mso-tab-count: 1;"> </span>$ 58,852<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.75pt; mso-row-margin-right: .35pt; mso-yfti-irow: 5;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.75pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 3.35pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 141.0pt; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Delivery<span style="letter-spacing: -1.05pt;"> </span>Charges<span style="mso-tab-count: 1;"> </span>$ 13,984<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.0pt; mso-row-margin-right: .35pt; mso-yfti-irow: 6;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 3.35pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 135.0pt; text-autospace: none;"><i><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Total<span style="letter-spacing: -.15pt;"> </span>Variable<span style="letter-spacing: -.15pt;"> </span>Costs<span style="mso-tab-count: 1;"> </span></span></i><span style="font-family: "Times New Roman"; font-size: 12.0pt;">$ 303,770<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.0pt; mso-row-margin-right: .35pt; mso-yfti-irow: 7;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 3.35pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 135.0pt; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Contribution<span style="letter-spacing: -.65pt;"> </span>Margin<span style="mso-tab-count: 1;"> </span>$ 158,682 <span style="letter-spacing: 1.5pt;"><span style="mso-spacerun: yes;"> </span></span>34%<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.75pt; mso-row-margin-right: .35pt; mso-yfti-irow: 8;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.75pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Less:<span style="letter-spacing: -.45pt;"> </span>Fixed<span style="letter-spacing: -.15pt;"> </span>Costs:</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.0pt; mso-row-margin-right: .35pt; mso-yfti-irow: 9;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 143.0pt; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Advertising<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.25pt;"> </span>1,850</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.75pt; mso-row-margin-right: .35pt; mso-yfti-irow: 10;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.75pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 137.0pt; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Depreciation<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.2pt;"> </span>13,250</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.0pt; mso-row-margin-right: .35pt; mso-yfti-irow: 11;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 143.0pt; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt; letter-spacing: -.05pt;">Insuranc</span><span style="font-family: Arial; font-size: 12.0pt;">e<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.25pt;"> </span>5,400</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.0pt; mso-row-margin-right: .35pt; mso-yfti-irow: 12;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 143.0pt; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Payroll<span style="letter-spacing: -.65pt;"> </span>Taxes<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.25pt;"> </span>8,200</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.75pt; mso-row-margin-right: .35pt; mso-yfti-irow: 13;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.75pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 143.0pt; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Rent<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.25pt;"> </span>9,600</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.4pt; mso-row-margin-right: .35pt; mso-yfti-irow: 14;"> <td colspan="3" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.4pt; mso-border-bottom-alt: #ACA899 .75pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 217.5pt;" valign="top" width="290"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 137.0pt; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Utilities<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.2pt;"> </span>17,801</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid #EBE9D7 1.0pt; border: none; mso-cell-special: placeholder;" width="0"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 21.0pt; mso-row-margin-left: .35pt; mso-yfti-irow: 15;"> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> <td style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: none; border-top: none; height: 21.0pt; mso-border-bottom-alt: solid #ACA899 .25pt; mso-border-left-alt: solid #EBE9D7 .75pt; mso-border-top-alt: solid #EBE9D7 .75pt; mso-border-top-alt: solid #EBE9D7 .75pt; padding: 0in 0in 0in 0in; width: 133.1pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Wages</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td colspan="2" style="border-bottom: solid #ACA899 1.0pt; border-left: none; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: solid #ACA899 .25pt; mso-border-right-alt: solid #ACA899 .75pt; mso-border-top-alt: solid #EBE9D7 .75pt; mso-border-top-alt: solid #EBE9D7 .75pt; padding: 0in 0in 0in 0in; width: 84.4pt;" valign="top" width="113"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 4.5pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">$<span style="letter-spacing: -.2pt;"> </span>40,000</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 21.0pt; mso-row-margin-left: .35pt; mso-yfti-irow: 16;"> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> <td style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: none; border-top: none; height: 21.0pt; mso-border-bottom-alt: solid #ACA899 .25pt; mso-border-left-alt: solid #EBE9D7 .75pt; mso-border-top-alt: solid #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 133.1pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><i><span style="font-family: Arial; font-size: 12.0pt;">Total<span style="letter-spacing: .2pt;"> </span>Fixed<span style="letter-spacing: .2pt;"> </span>Costs</span></i><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td colspan="2" style="border-bottom: solid #ACA899 1.0pt; border-left: none; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: solid #ACA899 .25pt; mso-border-right-alt: solid #ACA899 .75pt; mso-border-top-alt: solid #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 84.4pt;" valign="top" width="113"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 4.5pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">$<span style="letter-spacing: -.2pt;"> </span>96,101</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 22.5pt; mso-row-margin-left: .35pt; mso-yfti-irow: 17; mso-yfti-lastrow: yes;"> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="0"><div class="MsoNormal"><br />
</div></td> <td style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: none; border-top: none; height: 22.5pt; mso-border-bottom-alt: solid #ACA899 .75pt; mso-border-left-alt: solid #EBE9D7 .75pt; mso-border-top-alt: solid #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 133.1pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 3.3pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: Arial; font-size: 12.0pt;">Net<span style="letter-spacing: -.1pt;"> </span>Operating<span style="letter-spacing: -.1pt;"> </span>Income</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td colspan="2" style="border-bottom: solid #ACA899 1.0pt; border-left: none; border-right: solid #ACA899 1.0pt; border-top: none; height: 22.5pt; mso-border-bottom-alt: solid #ACA899 .75pt; mso-border-right-alt: solid #ACA899 .75pt; mso-border-top-alt: solid #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 84.4pt;" valign="top" width="113"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 4.5pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">$<span style="letter-spacing: -.2pt;"> </span>62,581</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<!--[if !supportMisalignedColumns]-->
<tr height="0"> <td style="border: none;" width="0"></td> <td style="border: none;" width="177"></td> <td style="border: none;" width="112"></td> <td style="border: none;" width="0"></td> </tr>
<!--[endif]--> </tbody></table><div class="MsoNormal" style="line-height: 11.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.45pt; margin-top: 1.45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><!--[if gte vml 1]><v:group
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fillcolor="#aca899" stroked="f"> <v:path arrowok="t"/> </v:shape><w:wrap anchorx="page"/> </v:group><![endif]--><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Contribution<span style="letter-spacing: .1pt;"> </span>format<span style="letter-spacing: .1pt;"> </span>income<span style="letter-spacing: .1pt;"> </span>statements </span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">can<span style="letter-spacing: .25pt;"> </span>be<span style="letter-spacing: .25pt;"> </span>drawn<span style="letter-spacing: .25pt;"> </span>up<span style="letter-spacing: .25pt;"> </span>with<span style="letter-spacing: .25pt;"> </span>data<span style="letter-spacing: .25pt;"> </span>from<span style="letter-spacing: .25pt;"> </span>more<span style="letter-spacing: .25pt;"> </span>than<span style="letter-spacing: .25pt;"> </span>one year's income statements, if you're interested in tracking your contribution margins over time. Perhaps even more usefully, they can be drawn up for each product<span style="letter-spacing: .15pt;"> </span>line<span style="letter-spacing: .3pt;"> </span>or<span style="letter-spacing: .1pt;"> </span><span style="mso-font-width: 101%;">service </span>you offer. Here's an example, showing a breakdown of Beta's three main product lines:<o:p></o:p></span></div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 70.95pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 21.4pt; mso-yfti-irow: 0;"> <td colspan="4" style="border-bottom: #ACA899; border-left: #EBE9D7; border-right: #ACA899; border-style: solid; border-top: #EBE9D7; border-width: 1.0pt; height: 21.4pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #EBE9D7 .75pt; padding: 0in 0in 0in 0in; width: 298.55pt;" valign="top" width="398"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 127.45pt; margin-right: 0in; margin-top: 3.3pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 188.0pt 249.0pt; text-autospace: none;"><b><span style="font-family: Arial; font-size: 12.0pt;">Line<span style="letter-spacing: -.5pt;"> </span>A<span style="mso-tab-count: 1;"> </span>Line<span style="letter-spacing: .1pt;"> </span>B<span style="mso-tab-count: 1;"> </span>Line<span style="letter-spacing: .1pt;"> </span>C</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 21.75pt; mso-yfti-irow: 1;"> <td colspan="4" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.75pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 298.55pt;" valign="top" width="398"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 119.0pt; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Sales<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.1pt;"> </span>120,400 <span style="letter-spacing: .85pt;"><span style="mso-spacerun: yes;"> </span></span>$<span style="letter-spacing: -.1pt;"> </span>202,050 <span style="letter-spacing: 1.6pt;"><span style="mso-spacerun: yes;"> </span></span>$<span style="letter-spacing: -.1pt;"> </span>140,002</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 21.0pt; mso-yfti-irow: 2;"> <td colspan="4" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 298.55pt;" valign="top" width="398"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Less<span style="letter-spacing: -.25pt;"> </span>Variable<span style="letter-spacing: -.25pt;"> </span>Costs:</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 21.75pt; mso-yfti-irow: 3;"> <td colspan="4" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.75pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 298.55pt;" valign="top" width="398"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 125.0pt 248.0pt; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Cost<span style="letter-spacing: -.2pt;"> </span>of<span style="letter-spacing: -.2pt;"> </span>Goods<span style="letter-spacing: -.2pt;"> </span>Sold<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.2pt;"> </span>70,030 <span style="letter-spacing: .85pt;"><span style="mso-spacerun: yes;"> </span></span>$<span style="letter-spacing: -.1pt;"> </span>100,900<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.2pt;"> </span>60,004</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 21.0pt; mso-yfti-irow: 4;"> <td colspan="4" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 298.55pt;" valign="top" width="398"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 125.0pt 186.0pt 278.0pt; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Sales<span style="letter-spacing: -.35pt;"> </span>Commissions<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.1pt;"> </span>18,802<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.2pt;"> </span>40,050<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.1pt;"> </span>0</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 21.0pt; mso-yfti-irow: 5;"> <td colspan="4" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.0pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 298.55pt;" valign="top" width="398"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 142.0pt 193.0pt 254.0pt; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Delivery<span style="letter-spacing: -.5pt;"> </span>Charges<span style="mso-tab-count: 1;"> </span>$ 900<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.25pt;"> </span>8,084<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.25pt;"> </span>5,000</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 21.75pt; mso-yfti-irow: 6;"> <td colspan="4" style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 21.75pt; mso-border-bottom-alt: #ACA899 .25pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .75pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 298.55pt;" valign="top" width="398"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 125.0pt 248.0pt; text-autospace: none;"><i><span style="font-family: Arial; font-size: 12.0pt;">Total Variable Costs<span style="mso-tab-count: 1;"> </span></span></i><span style="font-family: Arial; font-size: 12.0pt;">$<span style="letter-spacing: -.2pt;"> </span>89,732 <span style="letter-spacing: .85pt;"><span style="mso-spacerun: yes;"> </span></span>$<span style="letter-spacing: -.1pt;"> </span>149,034<span style="mso-tab-count: 1;"> </span>$<span style="letter-spacing: -.2pt;"> </span>65,004</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 35.65pt; mso-yfti-irow: 7; mso-yfti-lastrow: yes;"> <td style="border-bottom: solid #ACA899 1.0pt; border-left: solid #EBE9D7 1.0pt; border-right: solid #ACA899 1.0pt; border-top: none; height: 35.65pt; mso-border-bottom-alt: #ACA899 .75pt; mso-border-left-alt: #EBE9D7 .75pt; mso-border-right-alt: #ACA899 .25pt; mso-border-style-alt: solid; mso-border-top-alt: #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 115.55pt;" valign="top" width="154"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 3.7pt; margin-right: 0in; margin-top: 4.05pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: Arial; font-size: 12.0pt;">Contribution<span style="letter-spacing: -.45pt;"> </span>Margin</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid #ACA899 1.0pt; border-left: none; border-right: solid #ACA899 1.0pt; border-top: none; height: 35.65pt; mso-border-alt: solid #ACA899 .25pt; mso-border-bottom-alt: solid #ACA899 .75pt; mso-border-left-alt: solid #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 60.75pt;" valign="top" width="81"> <div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.8pt; margin-right: 1.25pt; margin-top: 4.5pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none; text-indent: -15.0pt;"><span style="font-family: Arial; font-size: 12.0pt;">$<span style="letter-spacing: -.2pt;"> </span>30,668 <span style="letter-spacing: -.05pt;">(25%)</span></span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid #ACA899 1.0pt; border-left: none; border-right: solid #ACA899 1.0pt; border-top: none; height: 35.65pt; mso-border-alt: solid #ACA899 .25pt; mso-border-bottom-alt: solid #ACA899 .75pt; mso-border-left-alt: solid #ACA899 .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 61.5pt;" valign="top" width="82"> <div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.8pt; margin-right: 2.0pt; margin-top: 4.5pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none; text-indent: -15.0pt;"><span style="font-family: Arial; font-size: 12.0pt;">$<span style="letter-spacing: -.2pt;"> </span>53,016 <span style="letter-spacing: -.05pt;">(26%)</span></span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid #ACA899 1.0pt; border-left: none; border-right: solid #ACA899 1.0pt; border-top: none; height: 35.65pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: #ACA899; mso-border-left-alt: .25pt; mso-border-left-alt: solid #ACA899 .25pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .25pt; mso-border-top-alt: solid #ACA899 .25pt; padding: 0in 0in 0in 0in; width: 60.75pt;" valign="top" width="81"> <div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.8pt; margin-right: .9pt; margin-top: 4.5pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none; text-indent: -15.0pt;"><span style="font-family: Arial; font-size: 12.0pt;">$<span style="letter-spacing: -.2pt;"> </span>74,998 <span style="letter-spacing: -.05pt;">(54%)</span></span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: 12.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .4pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 98%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.05pt; margin-top: 1.55pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 98%;">Although<span style="letter-spacing: 1.35pt;"> </span>we've<span style="letter-spacing: 1.15pt;"> </span>only<span style="letter-spacing: 1.05pt;"> </span>shown<span style="letter-spacing: 1.2pt;"> </span>the<span style="letter-spacing: 1.0pt;"> </span>top<span style="letter-spacing: .15pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 98%;">half<span style="letter-spacing: .75pt;"> </span>of<span style="letter-spacing: .6pt;"> </span>the<span style="letter-spacing: .7pt;"> </span>contribution<span style="letter-spacing: 1.55pt;"> </span>format<span style="letter-spacing: 1.05pt;"> </span>income<span style="letter-spacing: 1.1pt;"> </span><span style="mso-font-width: 102%;">statem<span style="letter-spacing: -.05pt;">e</span></span><span style="mso-font-width: 97%;">nt, </span>it's immediately apparent that Product Line C is Beta's most profitable one, even though Beta <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>gets<span style="letter-spacing: 2.95pt;"> </span>more <span style="letter-spacing: .15pt;"><span style="mso-spacerun: yes;"> </span></span>sales <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>revenue <span style="letter-spacing: .7pt;"><span style="mso-spacerun: yes;"> </span></span>from <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>Line <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>B.<span style="letter-spacing: 2.6pt;"> </span>It<span style="letter-spacing: 2.45pt;"> </span>appears <span style="letter-spacing: .65pt;"><span style="mso-spacerun: yes;"> </span></span>that<span style="letter-spacing: 2.9pt;"> </span>Beta <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>would <span style="letter-spacing: .35pt;"><span style="mso-spacerun: yes;"> </span></span>do<span style="letter-spacing: 2.65pt;"> </span>well<span style="mso-spacerun: yes;"> </span><span style="mso-font-width: 104%;">by </span>emphasizing<span style="letter-spacing: 2.1pt;"> </span>Line<span style="letter-spacing: .55pt;"> </span>C in<span style="letter-spacing: .05pt;"> </span>its<span style="letter-spacing: .15pt;"> </span>product<span style="letter-spacing: 1.15pt;"> </span>mix.<span style="letter-spacing: .55pt;"> </span>Moreover,<span style="letter-spacing: 1.7pt;"> </span>the<span style="letter-spacing: .25pt;"> </span>statement<span style="letter-spacing: 1.5pt;"> </span>indicates<span style="letter-spacing: 1.4pt;"> </span>that<span style="letter-spacing: .4pt;"> </span><span style="mso-font-width: 104%;">perh<span style="letter-spacing: .05pt;">a</span></span><span style="letter-spacing: .2pt;">ps </span>prices for line A and line B products are too low. This is information that can't be gleaned from<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>regular income<span style="letter-spacing: -.05pt;"> </span>statements<span style="letter-spacing: -.05pt;"> </span>that<span style="letter-spacing: -.05pt;"> </span>your accountant<span style="letter-spacing: -.05pt;"> </span>routinely draws<span style="letter-spacing: -.05pt;"> </span>up each period.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 1.0pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 335.95pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: #3e75a1; font-family: "Times New Roman"; font-size: 12.0pt;">Breakeven<span style="letter-spacing: .25pt;"> </span>Analysis</span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 14.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .35pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.0pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 24.0pt 71.0pt 101.0pt 128.0pt 206.0pt 299.0pt 328.0pt 357.0pt 400.0pt 427.0pt; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">A<span style="letter-spacing: -2.85pt;"> </span><span style="mso-tab-count: 1;"> </span>second<span style="letter-spacing: -2.3pt;"> </span><span style="mso-tab-count: 1;"> </span>tool<span style="letter-spacing: -2.6pt;"> </span><span style="mso-tab-count: 1;"> </span>for<span style="letter-spacing: -2.7pt;"> </span><span style="mso-tab-count: 1;"> </span>management<span style="letter-spacing: -1.7pt;"> </span><span style="mso-tab-count: 1;"> </span>decisionmaking<span style="letter-spacing: -1.4pt;"> </span><span style="mso-tab-count: 1;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">that<span style="mso-tab-count: 1;"> </span>has<span style="mso-tab-count: 1;"> </span>grown<span style="mso-tab-count: 1;"> </span>out<span style="mso-tab-count: 1;"> </span>of cost/volume/profit<span style="letter-spacing: -.15pt;"> </span>analysis<span style="letter-spacing: -.15pt;"> </span>is<span style="letter-spacing: -.15pt;"> </span>breakeven<span style="letter-spacing: -.15pt;"> </span>analysis.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.2pt; margin-top: .35pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">Once you know what your variable costs are, as well as your overall fixed costs for the business, you can determine your breakeven point: the volume of sales needed to at least cover<span style="letter-spacing: .6pt;"> </span>all<span style="letter-spacing: .7pt;"> </span>your<span style="letter-spacing: .35pt;"> </span>costs.<span style="letter-spacing: 1.15pt;"> </span>You<span style="letter-spacing: .95pt;"> </span>can<span style="letter-spacing: .85pt;"> </span>also<span style="letter-spacing: .95pt;"> </span>compute<span style="letter-spacing: 1.6pt;"> </span>the<span style="letter-spacing: .8pt;"> </span>new<span style="letter-spacing: .95pt;"> </span>breakeven<span style="letter-spacing: 1.85pt;"> </span>point<span style="letter-spacing: 1.1pt;"> </span>that<span style="letter-spacing: .9pt;"> </span>you'd<span style="letter-spacing: 1.15pt;"> </span>need<span style="letter-spacing: 1.05pt;"> </span><span style="mso-font-width: 103%;">to</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.2pt; margin-top: 1.85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">meet<span style="letter-spacing: .9pt;"> </span>if<span style="letter-spacing: .9pt;"> </span>you<span style="letter-spacing: .9pt;"> </span>decided<span style="letter-spacing: .9pt;"> </span>to<span style="letter-spacing: .9pt;"> </span>increase<span style="letter-spacing: .9pt;"> </span>your<span style="letter-spacing: .9pt;"> </span>fixed<span style="letter-spacing: .9pt;"> </span>costs<span style="letter-spacing: .9pt;"> </span>(for<span style="letter-spacing: .9pt;"> </span>example,<span style="letter-spacing: .9pt;"> </span>if<span style="letter-spacing: .9pt;"> </span>you<span style="letter-spacing: .9pt;"> </span>undertook<span style="letter-spacing: .9pt;"> </span>a<span style="letter-spacing: .9pt;"> </span>major expansion<span style="letter-spacing: -.05pt;"> </span>project<span style="letter-spacing: -.05pt;"> </span>or<span style="letter-spacing: -.1pt;"> </span>bought<span style="letter-spacing: -.1pt;"> </span>some<span style="letter-spacing: -.1pt;"> </span>new<span style="letter-spacing: -.1pt;"> </span>office<span style="letter-spacing: -.05pt;"> </span>equipment).<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .1pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">Your<span style="letter-spacing: -.15pt;"> </span>breakeven<span style="letter-spacing: -.15pt;"> </span>point<span style="letter-spacing: -.15pt;"> </span>can<span style="letter-spacing: -.15pt;"> </span>be<span style="letter-spacing: -.15pt;"> </span>determined<span style="letter-spacing: -.15pt;"> </span>by<span style="letter-spacing: .25pt;"> </span>using<span style="letter-spacing: .25pt;"> </span>the<span style="letter-spacing: .25pt;"> </span>following<span style="letter-spacing: .25pt;"> </span>formulas:</span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 14.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .7pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.5pt;">§<span style="mso-tab-count: 1;"> </span></span><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">Sales<span style="letter-spacing: -.15pt;"> </span>Price<span style="letter-spacing: -.15pt;"> </span>per<span style="letter-spacing: -.15pt;"> </span>Unit —<span style="letter-spacing: -.05pt;"> </span>Variable Costs<span style="letter-spacing: -.05pt;"> </span>per Unit<span style="letter-spacing: -.05pt;"> </span>=<span style="letter-spacing: -.05pt;"> </span>Contribution Margin per Unit.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.25pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.5pt;">§<span style="mso-tab-count: 1;"> </span></span><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">Contribution <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>Margin<span style="letter-spacing: 2.45pt;"> </span>per<span style="letter-spacing: 1.85pt;"> </span>Unit<span style="letter-spacing: 2.05pt;"> </span>divided<span style="letter-spacing: 2.5pt;"> </span>by<span style="letter-spacing: 1.75pt;"> </span>Sales<span style="letter-spacing: 2.15pt;"> </span>Price<span style="letter-spacing: 2.15pt;"> </span>per<span style="letter-spacing: 1.85pt;"> </span>Unit<span style="letter-spacing: 2.05pt;"> </span>=<span style="letter-spacing: 1.6pt;"> </span><span style="mso-font-width: 103%;">Contribution</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 43.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">Margin<span style="letter-spacing: -.6pt;"> </span>Ratio.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.25pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-autospace: none;"><span style="color: black; font-family: Arial; font-size: 9.5pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">§<span style="mso-tab-count: 1;"> </span></span><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">Breakeven Sales<span style="letter-spacing: .05pt;"> </span>Volume<span style="letter-spacing: .05pt;"> </span>= Fixed Costs<span style="letter-spacing: .05pt;"> </span>divided<span style="letter-spacing: .05pt;"> </span>by<span style="letter-spacing: .05pt;"> </span>Contribution<span style="letter-spacing: -.25pt;"> </span>Margin<span style="letter-spacing: -.25pt;"> </span>Ratio.</span><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 11.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .75pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
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</tbody></table><!--[endif]--><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">Assume <span style="letter-spacing: .9pt;"><span style="mso-spacerun: yes;"> </span></span>that <span style="letter-spacing: .5pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>financial <span style="letter-spacing: 1.0pt;"><span style="mso-spacerun: yes;"> </span></span>statements <span style="letter-spacing: 1.15pt;"><span style="mso-spacerun: yes;"> </span></span>for <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 102%;">Lillian's</span><o:p></o:p></span><br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 119.75pt; margin-right: 62.95pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">Bakery <span style="letter-spacing: 2.6pt;"><span style="mso-spacerun: yes;"> </span></span>reveal <span style="letter-spacing: 2.5pt;"><span style="mso-spacerun: yes;"> </span></span>that <span style="letter-spacing: 2.25pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: 2.2pt;"><span style="mso-spacerun: yes;"> </span></span>bakery's <span style="letter-spacing: 2.7pt;"><span style="mso-spacerun: yes;"> </span></span>fixed <span style="letter-spacing: 2.4pt;"><span style="mso-spacerun: yes;"> </span></span>costs <span style="letter-spacing: 2.4pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 102%;">are</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 119.75pt; margin-right: 64.45pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">$49,000,<span style="letter-spacing: .6pt;"> </span>and<span style="letter-spacing: .6pt;"> </span>its<span style="letter-spacing: .6pt;"> </span>variable<span style="letter-spacing: .6pt;"> </span>costs<span style="letter-spacing: .6pt;"> </span>per<span style="letter-spacing: .6pt;"> </span>unit<span style="letter-spacing: .6pt;"> </span>of<span style="letter-spacing: .6pt;"> </span>production<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 119.75pt; margin-right: 151.45pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">(loaf<span style="letter-spacing: -.15pt;"> </span>of<span style="letter-spacing: -.15pt;"> </span>raisin<span style="letter-spacing: -.15pt;"> </span>coffee<span style="letter-spacing: -.15pt;"> </span>cake)<span style="letter-spacing: -.15pt;"> </span>are<span style="letter-spacing: -.15pt;"> </span>$.30.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 14.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .05pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 119.75pt; margin-right: 63.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Further<span style="letter-spacing: 2.95pt;"> </span>assume<span style="letter-spacing: 2.95pt;"> </span>that<span style="letter-spacing: 2.6pt;"> </span>its<span style="letter-spacing: 2.5pt;"> </span>sales<span style="letter-spacing: 2.7pt;"> </span>revenue<span style="mso-spacerun: yes;"> </span>is<span style="letter-spacing: 2.4pt;"> </span>$1.00<span style="letter-spacing: 2.8pt;"> </span><span style="mso-font-width: 102%;">per </span>loaf. <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>From <span style="letter-spacing: .3pt;"><span style="mso-spacerun: yes;"> </span></span>this <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>information, <span style="letter-spacing: .95pt;"><span style="mso-spacerun: yes;"> </span></span>it<span style="letter-spacing: 2.9pt;"> </span>can <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>be<span style="mso-spacerun: yes;"> </span><span style="mso-font-width: 102%;">determined </span>that, after the $.30 per loaf variable costs are covered, each<span style="letter-spacing: .1pt;"> </span>loaf<span style="letter-spacing: .05pt;"> </span>sold<span style="letter-spacing: .05pt;"> </span>can contribute<span style="letter-spacing: .65pt;"> </span>$.70<span style="letter-spacing: .1pt;"> </span>toward<span style="letter-spacing: .35pt;"> </span><span style="mso-font-width: 102%;">covering </span>fixed<span style="letter-spacing: -.7pt;"> </span>costs.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 119.75pt; margin-right: 62.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">Dividing <span style="letter-spacing: .65pt;"><span style="mso-spacerun: yes;"> </span></span>fixed <span style="letter-spacing: .3pt;"><span style="mso-spacerun: yes;"> </span></span>costs <span style="letter-spacing: .3pt;"><span style="mso-spacerun: yes;"> </span></span>by <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>contribution <span style="letter-spacing: 1.0pt;"><span style="mso-spacerun: yes;"> </span></span>to<span style="mso-spacerun: yes;"> </span><span style="mso-font-width: 102%;">those </span>costs<span style="letter-spacing: .3pt;"> </span>per<span style="letter-spacing: .1pt;"> </span>unit<span style="letter-spacing: .15pt;"> </span>of sales<span style="letter-spacing: .25pt;"> </span>tells<span style="letter-spacing: .2pt;"> </span>Lillian's<span style="letter-spacing: .6pt;"> </span>Bakery<span style="letter-spacing: .5pt;"> </span>at<span style="letter-spacing: .05pt;"> </span><span style="mso-font-width: 102%;">what </span>level <span style="letter-spacing: 2.15pt;"><span style="mso-spacerun: yes;"> </span></span>of <span style="letter-spacing: 1.9pt;"><span style="mso-spacerun: yes;"> </span></span>sales <span style="letter-spacing: 2.15pt;"><span style="mso-spacerun: yes;"> </span></span>it <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>will <span style="letter-spacing: 2.05pt;"><span style="mso-spacerun: yes;"> </span></span>break <span style="letter-spacing: 2.25pt;"><span style="mso-spacerun: yes;"> </span></span>even. <span style="letter-spacing: 2.2pt;"><span style="mso-spacerun: yes;"> </span></span>In <span style="letter-spacing: 1.9pt;"><span style="mso-spacerun: yes;"> </span></span>this <span style="letter-spacing: 2.05pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 102%;">case:</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.4pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 119.75pt; margin-right: 177.7pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">$49,000/$.70<span style="letter-spacing: -.35pt;"> </span>=<span style="letter-spacing: -.35pt;"> </span>70,000<span style="letter-spacing: -.35pt;"> </span>loaves.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 5.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .1pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 119.75pt; margin-right: 63.3pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">As sales exceed 70,000 loaves, Lillian's Bakery earns a profit.<span style="letter-spacing: .1pt;"> </span>Sales<span style="letter-spacing: .45pt;"> </span>of<span style="letter-spacing: .15pt;"> </span>less<span style="letter-spacing: .3pt;"> </span>than<span style="letter-spacing: .35pt;"> </span>70,000<span style="letter-spacing: .6pt;"> </span>loaves<span style="letter-spacing: .55pt;"> </span>produce<span style="letter-spacing: .7pt;"> </span><span style="mso-font-width: 102%;">a </span>loss.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 119.75pt; margin-right: 63.4pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">Lillian's Bakery can see that a 10,000 loaf increase in sales<span style="letter-spacing: .3pt;"> </span>over<span style="letter-spacing: .25pt;"> </span>the<span style="letter-spacing: .1pt;"> </span>breakeven<span style="letter-spacing: .8pt;"> </span>point<span style="letter-spacing: .3pt;"> </span>to 80,000<span style="letter-spacing: .45pt;"> </span>loaves<span style="letter-spacing: .45pt;"> </span><span style="mso-font-width: 102%;">will </span>produce<span style="letter-spacing: .25pt;"> </span>a<span style="letter-spacing: .25pt;"> </span>$7,000<span style="letter-spacing: .25pt;"> </span>profit,<span style="letter-spacing: .25pt;"> </span>and<span style="letter-spacing: .25pt;"> </span>a<span style="letter-spacing: .25pt;"> </span>30,000<span style="letter-spacing: .25pt;"> </span>loaf<span style="letter-spacing: .25pt;"> </span>increase<span style="letter-spacing: .25pt;"> </span>to<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 119.75pt; margin-right: 62.7pt; margin-top: .75pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">100,000<span style="letter-spacing: .65pt;"> </span>will<span style="letter-spacing: .25pt;"> </span>produce<span style="letter-spacing: .65pt;"> </span>a $21,000<span style="letter-spacing: .65pt;"> </span>profit.<span style="letter-spacing: .5pt;"> </span><span style="letter-spacing: -.05pt;">O</span>n<span style="letter-spacing: 1.05pt;"> </span>the<span style="letter-spacing: .9pt;"> </span>other hand,<span style="letter-spacing: .4pt;"> </span>a decline<span style="letter-spacing: .6pt;"> </span>in<span style="letter-spacing: .1pt;"> </span>sales<span style="letter-spacing: .35pt;"> </span>of<span style="letter-spacing: .1pt;"> </span>10,000<span style="letter-spacing: .55pt;"> </span>loaves<span style="letter-spacing: .5pt;"> </span><span style="mso-font-width: 102%;">from </span>breakeven<span style="letter-spacing: 3.0pt;"> </span>to<span style="letter-spacing: 2.2pt;"> </span>60,000<span style="letter-spacing: 2.65pt;"> </span>loaves<span style="letter-spacing: 2.6pt;"> </span>will<span style="letter-spacing: 2.35pt;"> </span>produce<span style="letter-spacing: 2.75pt;"> </span>a<span style="letter-spacing: 2.1pt;"> </span>loss<span style="letter-spacing: 2.35pt;"> </span><span style="mso-font-width: 102%;">of</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 119.75pt; margin-right: 62.85pt; margin-top: .75pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">$7,000,<span style="letter-spacing: .6pt;"> </span>and<span style="letter-spacing: .25pt;"> </span>a 30,000<span style="letter-spacing: .55pt;"> </span>decrease<span style="letter-spacing: .7pt;"> </span>from<span style="letter-spacing: .35pt;"> </span>the<span style="letter-spacing: .2pt;"> </span><span style="mso-font-width: 102%;">70,000 </span>breakeven<span style="letter-spacing: -.05pt;"> </span>point<span style="letter-spacing: -.05pt;"> </span>produces<span style="letter-spacing: -.05pt;"> </span>a<span style="letter-spacing: -.05pt;"> </span>$21,000<span style="letter-spacing: -.05pt;"> </span>loss.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 12.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .15pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.0pt; margin-top: 1.55pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">In<span style="letter-spacing: 1.3pt;"> </span>the<span style="letter-spacing: 1.3pt;"> </span>example<span style="letter-spacing: 1.6pt;"> </span>above,<span style="letter-spacing: 1.5pt;"> </span>a<span style="letter-spacing: 1.2pt;"> </span>25<span style="letter-spacing: 1.3pt;"> </span>percent </span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">increase<span style="letter-spacing: 1.25pt;"> </span>in<span style="letter-spacing: .95pt;"> </span>sales<span style="letter-spacing: 1.1pt;"> </span>from<span style="letter-spacing: 1.55pt;"> </span>80,000<span style="letter-spacing: 1.7pt;"> </span>loaves<span style="letter-spacing: 1.65pt;"> </span>to<span style="letter-spacing: 1.45pt;"> </span><span style="mso-font-width: 101%;">100,000 </span>loaves would produce an increase in profits from $7,000 to $21,000. Similarly, a small drop in sales below breakeven would produce a substantial increase in loss. How is this explained?<span style="letter-spacing: .9pt;"> </span>There<span style="letter-spacing: .4pt;"> </span>is obviously<span style="letter-spacing: .8pt;"> </span>more<span style="letter-spacing: .35pt;"> </span>involved<span style="letter-spacing: .7pt;"> </span>than<span style="letter-spacing: .25pt;"> </span>simply<span style="letter-spacing: 1.05pt;"> </span>trying<span style="letter-spacing: 1.25pt;"> </span>to<span style="letter-spacing: 1.05pt;"> </span>determine<span style="letter-spacing: 1.4pt;"> </span><span style="mso-font-width: 101%;">the </span>breakeven<span style="letter-spacing: 2.25pt;"> </span>point.<span style="letter-spacing: 1.4pt;"> </span>In<span style="letter-spacing: .7pt;"> </span>the<span style="letter-spacing: .9pt;"> </span>next<span style="letter-spacing: 1.15pt;"> </span>section,<span style="letter-spacing: 1.8pt;"> </span>we'll<span style="letter-spacing: 1.2pt;"> </span>show<span style="letter-spacing: 1.3pt;"> </span>that<span style="letter-spacing: 1.0pt;"> </span>the<span style="letter-spacing: .9pt;"> </span>concept<span style="letter-spacing: 1.8pt;"> </span>of<span style="letter-spacing: .7pt;"> </span>operating<span style="letter-spacing: 2.1pt;"> </span><span style="mso-font-width: 104%;">leverage</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.25pt; margin-top: 1.85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">explains<span style="letter-spacing: 1.4pt;"> </span>why<span style="letter-spacing: .6pt;"> </span>the<span style="letter-spacing: .35pt;"> </span>mix<span style="letter-spacing: .55pt;"> </span>of<span style="letter-spacing: .2pt;"> </span>fixed<span style="letter-spacing: .75pt;"> </span>and<span style="letter-spacing: .5pt;"> </span>variable<span style="letter-spacing: 1.35pt;"> </span>costs<span style="letter-spacing: .75pt;"> </span>can<span style="letter-spacing: .45pt;"> </span>have<span style="letter-spacing: .7pt;"> </span>a large<span style="letter-spacing: .75pt;"> </span>effect<span style="letter-spacing: .9pt;"> </span>on<span style="letter-spacing: .25pt;"> </span>your<span style="letter-spacing: .65pt;"> </span><span style="mso-font-width: 104%;">profit </span>levels,<span style="letter-spacing: -.1pt;"> </span>as<span style="letter-spacing: -.1pt;"> </span>your<span style="letter-spacing: -.1pt;"> </span>sales<span style="letter-spacing: -.1pt;"> </span>volume<span style="letter-spacing: -.1pt;"> </span>increases<span style="letter-spacing: -.1pt;"> </span>and<span style="letter-spacing: -.1pt;"> </span>decreases<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 334.7pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: #3e75a1; font-family: "Times New Roman"; font-size: 12.0pt;">O<span style="letter-spacing: -.05pt;">p</span>erating<span style="letter-spacing: -.1pt;"> </span>Leverage</span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 102%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.15pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 102%;">Once<span style="letter-spacing: .45pt;"> </span>you've<span style="letter-spacing: .45pt;"> </span>determined<span style="letter-spacing: .45pt;"> </span>your </span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 102%;">breakeven<span style="letter-spacing: .6pt;"> </span>point,<span style="letter-spacing: .6pt;"> </span>you<span style="letter-spacing: .6pt;"> </span>can<span style="letter-spacing: .6pt;"> </span>use<span style="letter-spacing: .6pt;"> </span>it<span style="letter-spacing: .6pt;"> </span>to<span style="letter-spacing: .6pt;"> </span>examine<span style="letter-spacing: .6pt;"> </span>the<span style="letter-spacing: .6pt;"> </span>effects<span style="letter-spacing: .6pt;"> </span>of increasing or decreasing the role of fixed costs in your operating structure.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .55pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.7pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">The<span style="letter-spacing: .1pt;"> </span>large<span style="letter-spacing: .15pt;"> </span>increase<span style="letter-spacing: .3pt;"> </span>in profits<span style="letter-spacing: .25pt;"> </span>as<span style="letter-spacing: .15pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">a<span style="letter-spacing: .1pt;"> </span>result<span style="letter-spacing: .1pt;"> </span>of<span style="letter-spacing: .1pt;"> </span>relatively<span style="letter-spacing: .1pt;"> </span>modest<span style="letter-spacing: .1pt;"> </span>increases<span style="letter-spacing: .1pt;"> </span>in<span style="letter-spacing: .7pt;"> </span>sales<span style="letter-spacing: .7pt;"> </span>over<span style="letter-spacing: .7pt;"> </span>the breakeven point, as well as the large increase in losses as a result of modest sales declines below <span style="letter-spacing: .8pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>breakeven <span style="letter-spacing: 1.6pt;"><span style="mso-spacerun: yes;"> </span></span>point, <span style="letter-spacing: .75pt;"><span style="mso-spacerun: yes;"> </span></span>can <span style="letter-spacing: .3pt;"><span style="mso-spacerun: yes;"> </span></span>be <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>attributed <span style="letter-spacing: 1.45pt;"><span style="mso-spacerun: yes;"> </span></span>to<span style="mso-spacerun: yes;"> </span>the <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>degree <span style="letter-spacing: .9pt;"><span style="mso-spacerun: yes;"> </span></span>to<span style="mso-spacerun: yes;"> </span>which <span style="letter-spacing: .8pt;"><span style="mso-spacerun: yes;"> </span></span>fixed <span style="letter-spacing: .6pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 104%;">costs </span>contributed<span style="letter-spacing: -.25pt;"> </span>to<span style="letter-spacing: -.25pt;"> </span>the<span style="letter-spacing: -.25pt;"> </span>sales.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 14.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.95pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">The<span style="letter-spacing: 2.4pt;"> </span>extent<span style="letter-spacing: 2.55pt;"> </span>to<span style="letter-spacing: 2.3pt;"> </span>which<span style="letter-spacing: 2.55pt;"> </span>a<span style="letter-spacing: 2.3pt;"> </span>business </span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">uses<span style="letter-spacing: .7pt;"> </span>fixed<span style="letter-spacing: 1.75pt;"> </span>costs<span style="letter-spacing: 2.1pt;"> </span>(compared<span style="letter-spacing: 2.65pt;"> </span>to<span style="letter-spacing: 1.8pt;"> </span>variable<span style="letter-spacing: 2.4pt;"> </span>costs)<span style="letter-spacing: 2.2pt;"> </span>in<span style="letter-spacing: 1.8pt;"> </span><span style="mso-font-width: 102%;">its </span>operations is referred to as "operating leverage." The greater the use of operating leverage (fixed costs, often associated with fixed assets), the larger the increase in profits as sales rise<span style="letter-spacing: .05pt;"> </span>and<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>larger<span style="letter-spacing: .05pt;"> </span>the increase<span style="letter-spacing: -.25pt;"> </span>in<span style="letter-spacing: -.25pt;"> </span>loss<span style="letter-spacing: -.25pt;"> </span>as<span style="letter-spacing: -.25pt;"> </span>sales<span style="letter-spacing: -.25pt;"> </span>fall.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 72.5pt; margin-right: 63.55pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">The<span style="letter-spacing: 1.75pt;"> </span>employment<span style="mso-spacerun: yes;"> </span>of<span style="letter-spacing: 1.4pt;"> </span>a<span style="letter-spacing: 1.35pt;"> </span>high<span style="letter-spacing: 1.85pt;"> </span>level<span style="letter-spacing: 1.9pt;"> </span>of<span style="letter-spacing: 1.4pt;"> </span>fixed<span style="letter-spacing: 1.95pt;"> </span>assets<span style="letter-spacing: 2.05pt;"> </span>(with<span style="letter-spacing: 1.95pt;"> </span><span style="mso-font-width: 103%;">fixed </span>costs) <span style="letter-spacing: .35pt;"><span style="mso-spacerun: yes;"> </span></span>at <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>high <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>volume <span style="letter-spacing: .9pt;"><span style="mso-spacerun: yes;"> </span></span>increases <span style="letter-spacing: 1.1pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>profit <span style="letter-spacing: .35pt;"><span style="mso-spacerun: yes;"> </span></span>potential <span style="letter-spacing: 1.05pt;"><span style="mso-spacerun: yes;"> </span></span>of<span style="mso-spacerun: yes;"> </span><span style="mso-font-width: 103%;">a </span>business.<span style="letter-spacing: .95pt;"> </span>At low<span style="letter-spacing: .2pt;"> </span>sales<span style="letter-spacing: .35pt;"> </span>volume,<span style="letter-spacing: .8pt;"> </span>however,<span style="letter-spacing: .95pt;"> </span>losses<span style="letter-spacing: .5pt;"> </span>multiply;<span style="letter-spacing: .95pt;"> </span><span style="mso-font-width: 103%;">and </span>difficulty<span style="letter-spacing: 2.4pt;"> </span>in<span style="letter-spacing: 1.7pt;"> </span>meeting<span style="letter-spacing: 2.3pt;"> </span>your<span style="letter-spacing: 1.95pt;"> </span>fixed<span style="letter-spacing: 2.0pt;"> </span>costs,<span style="letter-spacing: 2.05pt;"> </span>such as<span style="letter-spacing: 2.3pt;"> </span>payments<span style="letter-spacing: 2.3pt;"> </span>for plant<span style="letter-spacing: -.1pt;"> </span>and<span style="letter-spacing: -.1pt;"> </span>equipment,<span style="letter-spacing: -.1pt;"> </span>may<span style="letter-spacing: -.1pt;"> </span>ensue.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 72.5pt; margin-right: 63.95pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">For<span style="letter-spacing: 2.65pt;"> </span>most<span style="mso-spacerun: yes;"> </span>small <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>businesses, <span style="letter-spacing: .35pt;"><span style="mso-spacerun: yes;"> </span></span>limiting <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>downside <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>risk<span style="letter-spacing: 2.65pt;"> </span>is<span style="letter-spacing: 2.55pt;"> </span><span style="mso-font-width: 103%;">more </span>important than increasing potential profits, so it's wise to keep your<span style="letter-spacing: -.2pt;"> </span>fixed<span style="letter-spacing: -.2pt;"> </span>costs<span style="letter-spacing: -.2pt;"> </span>low<span style="letter-spacing: -.2pt;"> </span>wherever<span style="letter-spacing: -.2pt;"> </span>possible.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 22.45pt; margin-top: 1.5pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">A<span style="letter-spacing: -.05pt;"> </span>business<span style="letter-spacing: -.05pt;"> </span>often<span style="letter-spacing: -.05pt;"> </span>can<span style="letter-spacing: -.05pt;"> </span>choose<span style="letter-spacing: -.05pt;"> </span>between<span style="letter-spacing: .15pt;"> </span></span></b><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">a<span style="letter-spacing: .15pt;"> </span>high level of fixed assets and a lower level of fixed<span style="letter-spacing: .05pt;"> </span>assets. For<span style="letter-spacing: .05pt;"> </span>instance,<span style="letter-spacing: .05pt;"> </span>some<span style="letter-spacing: .05pt;"> </span>equipment<span style="letter-spacing: .05pt;"> </span>items are<span style="letter-spacing: .05pt;"> </span>substitutes<span style="letter-spacing: .05pt;"> </span>for labor (and labor is commonly considered a variable cost). If labor is not replaced with equipment, fixed costs<span style="letter-spacing: -.05pt;"> </span>are<span style="letter-spacing: -.05pt;"> </span>held<span style="letter-spacing: -.05pt;"> </span>lower, and<span style="letter-spacing: -.05pt;"> </span>variable<span style="letter-spacing: -.05pt;"> </span>costs are<span style="letter-spacing: .05pt;"> </span>higher.<span style="letter-spacing: .05pt;"> </span>With a<span style="letter-spacing: .05pt;"> </span>lower level<span style="letter-spacing: .05pt;"> </span>of operating<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">leverage, the business shows less growth in profits as sales rise, but faces less risk of loss<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="color: black; font-family: "Times New Roman"; font-size: 12.0pt;">as<span style="letter-spacing: -.25pt;"> </span>sales<span style="letter-spacing: -.25pt;"> </span>decline.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-16828495090824964902011-06-20T01:53:00.000-07:002011-06-20T01:53:55.084-07:00You are required to prepare a Schedule of changes in working capital and a Funds Flow Statement<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 24.0pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 47.0pt; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">You<span style="letter-spacing: .7pt;"> </span>are<span style="letter-spacing: .7pt;"> </span>required<span style="letter-spacing: .7pt;"> </span>to<span style="letter-spacing: .7pt;"> </span>prepare<span style="letter-spacing: .7pt;"> </span>a<span style="letter-spacing: .7pt;"> </span>Schedule<span style="letter-spacing: .7pt;"> </span>of<span style="letter-spacing: .7pt;"> </span>changes<span style="letter-spacing: .7pt;"> </span>in<span style="letter-spacing: .7pt;"> </span>working<span style="letter-spacing: .7pt;"> </span>capital<span style="letter-spacing: .7pt;"> </span>and<span style="letter-spacing: .7pt;"> </span>a <span style="letter-spacing: -.05pt;">Fund</span>s<span style="letter-spacing: .4pt;"> </span>Flow<span style="letter-spacing: .55pt;"> </span>Statement<span style="letter-spacing: .55pt;"> </span>from<span style="letter-spacing: .55pt;"> </span>the<span style="letter-spacing: .55pt;"> </span>Balance<span style="letter-spacing: .55pt;"> </span>Sheets<span style="letter-spacing: .55pt;"> </span>of<span style="letter-spacing: .55pt;"> </span>Amazon<span style="letter-spacing: .55pt;"> </span>Ltd<span style="letter-spacing: .55pt;"> </span>as<span style="letter-spacing: .55pt;"> </span>on<span style="letter-spacing: .55pt;"> </span>31</span></b><b><span style="font-family: "Times New Roman"; font-size: 8.0pt; letter-spacing: .4pt; mso-text-raise: 5.0pt; position: relative; top: -5.0pt;">s</span></b><b><span style="font-family: "Times New Roman"; font-size: 8.0pt; mso-text-raise: 5.0pt; position: relative; top: -5.0pt;">t<span style="letter-spacing: 1.65pt;"> </span></span></b><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Dec.<span style="letter-spacing: -.2pt;"> </span>2008 and<span style="letter-spacing: 2.4pt;"> </span>2009.</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 14.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .5pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 5.1pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 28.5pt; mso-yfti-irow: 0;"> <td style="border: solid black 1.0pt; height: 28.5pt; mso-border-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Liabilities</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 28.5pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 52.5pt;" valign="top" width="70"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2008</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .3pt;">Rs.</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 28.5pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 52.5pt;" valign="top" width="70"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2009</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .3pt;">Rs.</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 28.5pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 126.75pt;" valign="top" width="169"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .15pt;">Assets</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 28.5pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 52.5pt;" valign="top" width="70"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2008</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .3pt;">Rs.</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-left: none; border: solid black 1.0pt; height: 28.5pt; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 53.25pt;" valign="top" width="71"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2009</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .3pt;">Rs.</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 1.75in; mso-yfti-irow: 1; mso-yfti-lastrow: yes;"> <td style="border-bottom: none; border-left: solid black 1.0pt; border-right: solid black 1.0pt; border-top: none; height: 1.75in; mso-border-left-alt: solid black .25pt; mso-border-right-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"> <div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: .7in; margin-top: .05pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Share<span style="letter-spacing: -.45pt;"> </span>capital Gen.<span style="letter-spacing: -.55pt;"> </span>Reserve P&L<span style="letter-spacing: -.55pt;"> </span>A/c <span style="letter-spacing: -.05pt;">Creditors </span>Bills<span style="letter-spacing: -.75pt;"> </span>payable<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 2.35pt; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Provision<span style="letter-spacing: -.2pt;"> </span>for<span style="letter-spacing: -.2pt;"> </span>taxation Provision<span style="letter-spacing: 2.4pt;"> </span>for<span style="letter-spacing: 2.1pt;"> </span><span style="mso-font-width: 101%;">doubtful </span>debts.<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 1.75in; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 52.5pt;" valign="top" width="70"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2,00,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">28,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">32,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">16,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2,400<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">32,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .2pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">800<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 1.75in; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 52.5pt;" valign="top" width="70"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2,00,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">36,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">26,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">10,800<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">1,600<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">36,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .2pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">1,200<o:p></o:p></span></div></td> <td style="border-right: solid black 1.0pt; border: none; height: 1.75in; mso-border-left-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; mso-border-right-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 126.75pt;" valign="top" width="169"> <div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 60.85pt; margin-top: .05pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Goodwill Buildings <span style="letter-spacing: -.05pt;">Plant Investments </span>Stock<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Bills<span style="letter-spacing: -.75pt;"> </span>receivable<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Debtors<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Cash<span style="letter-spacing: -.25pt;"> </span>&<span style="letter-spacing: -.25pt;"> </span>Bank<span style="letter-spacing: -.25pt;"> </span>balance<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 1.75in; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 52.5pt;" valign="top" width="70"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">24,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">80,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">74,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">20,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">60,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">4,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">36,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.95pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">13,200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 1.75in; mso-border-alt: solid black .25pt; mso-border-left-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 53.25pt;" valign="top" width="71"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">24,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">72,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">72,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">22,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">46,800<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">6,400<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">38,000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.7pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">30,400<o:p></o:p></span></div></td> </tr>
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</div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
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<tr style="height: 14.25pt; mso-yfti-irow: 0;"> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 102.35pt;" valign="top" width="136"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Current<span style="letter-spacing: -.5pt;"> </span>Assets<o:p></o:p></span></div></td> <td colspan="4" style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 257.65pt;" valign="top" width="344"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 1;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 102.35pt;" valign="top" width="136"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Cash<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 76.9pt;" valign="top" width="103"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 34.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">13,200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 63.4pt;" valign="top" width="85"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .25in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">30,400<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.4pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">17,200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.5pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 30.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .1pt;">----</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 2;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 102.35pt;" valign="top" width="136"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Debtors<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 76.9pt;" valign="top" width="103"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 34.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">36,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 63.4pt;" valign="top" width="85"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .25in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">38,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 18.4pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.5pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 30.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .1pt;">----</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 3;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 102.35pt;" valign="top" width="136"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: -.05pt;">B.R.</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 76.9pt;" valign="top" width="103"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 40.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">4,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 63.4pt;" valign="top" width="85"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">6,400<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 18.4pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2,400<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.5pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 30.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .1pt;">----</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 4;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 102.35pt;" valign="top" width="136"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Stock<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 76.9pt;" valign="top" width="103"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 34.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">60,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 63.4pt;" valign="top" width="85"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .25in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">46,800<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .1pt;">----</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.5pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 13.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">13,200<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 5; mso-yfti-lastrow: yes;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 102.35pt;" valign="top" width="136"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Total<span style="letter-spacing: -.55pt;"> </span>(A)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 76.9pt;" valign="top" width="103"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.9pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">1,13,200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 63.4pt;" valign="top" width="85"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">1,21,600<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.5pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: 11.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 11.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 11.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="Section1"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 1.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 10.0pt;">Fund<span style="letter-spacing: -.2pt;"> </span>Flow<span style="letter-spacing: -.2pt;"> </span>Statement</span></b><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: always;" /> </span> <div class="MsoNormal" style="line-height: 1.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .45pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 38.5pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 14.25pt; mso-yfti-irow: 0;"> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 145.9pt;" valign="top" width="195"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">Provision<span style="letter-spacing: -.25pt;"> </span>for<span style="letter-spacing: -.25pt;"> </span>doubtful<span style="letter-spacing: -.25pt;"> </span>debts<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 30.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">800<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 61.5pt;" valign="top" width="82"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">1,200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.25pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 29.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt; letter-spacing: .25pt;">---</span><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 23.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">400<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 1;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 145.9pt;" valign="top" width="195"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">Bills<span style="letter-spacing: -.75pt;"> </span>payable<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 21.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">2,400<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 61.5pt;" valign="top" width="82"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 25.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">1,600<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.25pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">800<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt; letter-spacing: .25pt;">---</span><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 2;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 145.9pt;" valign="top" width="195"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt; letter-spacing: -.05pt;">Creditors</span><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 15.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">16,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 61.5pt;" valign="top" width="82"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 19.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">10,800<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.25pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 29.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt; letter-spacing: .25pt;">---</span><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt; letter-spacing: .25pt;">---</span><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 3;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 145.9pt;" valign="top" width="195"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">Total<span style="letter-spacing: -.65pt;"> </span>(B)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 15.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">19,200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 61.5pt;" valign="top" width="82"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 19.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">13,600<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.25pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 4;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 145.9pt;" valign="top" width="195"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">Working<span style="letter-spacing: -.55pt;"> </span>capital<span style="letter-spacing: -.55pt;"> </span>(A<span style="letter-spacing: .5pt;">-</span>B)<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 15.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">94,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 61.5pt;" valign="top" width="82"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">1,08,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.25pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 5;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 145.9pt;" valign="top" width="195"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">Increase<span style="letter-spacing: -.2pt;"> </span>in<span style="letter-spacing: -.2pt;"> </span>working<span style="letter-spacing: -.2pt;"> </span>capital<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 15.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">14,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 61.5pt;" valign="top" width="82"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 39.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt; letter-spacing: .25pt;">---</span><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.25pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 29.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt; letter-spacing: .25pt;">---</span><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">14,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 6; mso-yfti-lastrow: yes;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 145.9pt;" valign="top" width="195"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">1,08,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 61.5pt;" valign="top" width="82"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 10.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">1,08,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 50.25pt;" valign="top" width="67"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">27,600<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 45.0pt;" valign="top" width="60"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">27,600<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: 11.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
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</div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 28.0pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 14.25pt; mso-yfti-irow: 0;"> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.4pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">To<span style="letter-spacing: -.2pt;"> </span>Bank<span style="letter-spacing: .5pt;">-</span>tax<span style="letter-spacing: -.65pt;"> </span>paid<o:p></o:p></span></div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 177.35pt;" valign="top" width="236"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.1pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 1.0in; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">34,000<span style="mso-tab-count: 1;"> </span>By<span style="letter-spacing: -.25pt;"> </span>Balance<span style="letter-spacing: -.25pt;"> </span>b/d<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 72.75pt;" valign="top" width="97"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">32,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 15.0pt; mso-yfti-irow: 1;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.0pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.4pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">To<span style="letter-spacing: -.3pt;"> </span>Balance<span style="letter-spacing: -.3pt;"> </span>c/d<o:p></o:p></span></div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border: none; height: 15.0pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 177.35pt;" valign="top" width="236"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.1pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 1.0in; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">36,000<span style="mso-tab-count: 1;"> </span>By<span style="letter-spacing: -.3pt;"> </span>P<span style="letter-spacing: -.2pt;"> </span>&<span style="letter-spacing: -.25pt;"> </span>L<span style="letter-spacing: -.2pt;"> </span>a/c<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 15.0pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 72.75pt;" valign="top" width="97"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">38,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 28.5pt; mso-yfti-irow: 2;"> <td colspan="4" style="height: 28.5pt; padding: 0in 0in 0in 0in; width: 382.5pt;" valign="top" width="510"> <div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: -2.05pt; margin-right: -2.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 158.0pt 343.0pt; text-align: center; text-autospace: none;"><u><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 1;"> </span>70,000 <span style="mso-tab-count: 1;"> </span>70,000<span style="letter-spacing: .75pt;"> </span></span></u><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span></div><div align="center" class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 166.1pt; margin-right: 165.35pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: center; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 10.0pt;">Plant<span style="letter-spacing: -.4pt;"> </span>A/c</span></b><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 3;"> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.4pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 16.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">To<span style="letter-spacing: -.3pt;"> </span>Balance<span style="letter-spacing: -.3pt;"> </span>b/d<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 69.35pt;" valign="top" width="92"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 31.1pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">74,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 1.5in;" valign="top" width="144"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">By<span style="letter-spacing: -1.0pt;"> </span>Depreciation<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 72.75pt;" valign="top" width="97"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 30.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">8,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 4;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.4pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 16.5pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">To<span style="letter-spacing: -.2pt;"> </span>Bank<span style="letter-spacing: .5pt;">-</span><span style="letter-spacing: -.05pt;">purchase</span><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 69.35pt;" valign="top" width="92"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 37.1pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">6,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 1.5in;" valign="top" width="144"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">By<span style="letter-spacing: -.55pt;"> </span>Balance<span style="letter-spacing: -.1pt;"> </span>c/d<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 72.75pt;" valign="top" width="97"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">72,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 5; mso-yfti-lastrow: yes;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.4pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 69.35pt;" valign="top" width="92"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 31.1pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">80,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 1.5in;" valign="top" width="144"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 72.75pt;" valign="top" width="97"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">80,000<o:p></o:p></span></div></td> </tr>
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<tr> <td><!--[endif]--> <div class="shape" style="padding: 0pt 0pt 0pt 0pt;" v:shape="_x0000_s1267"> <table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 14.25pt; mso-yfti-irow: 0;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 104.65pt;" valign="top" width="140"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 150.0pt;" valign="top" width="200"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 13.85pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Investment<span style="letter-spacing: -.4pt;"> </span>A/c</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 1;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 104.65pt;" valign="top" width="140"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">To<span style="letter-spacing: -.3pt;"> </span>Balance<span style="letter-spacing: -.3pt;"> </span>b/d<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 150.0pt;" valign="top" width="200"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.6pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 55.0pt; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">20,000<span style="mso-tab-count: 1;"> </span>By<span style="letter-spacing: -.3pt;"> </span>Balance<span style="letter-spacing: -.3pt;"> </span>c/d<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 22.15pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">22,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 2;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 104.65pt;" valign="top" width="140"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">To<span style="letter-spacing: -.2pt;"> </span>Bank<span style="letter-spacing: .5pt;">-</span><span style="letter-spacing: -.05pt;">purchase</span><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 150.0pt;" valign="top" width="200"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 17.6pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">2,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 3;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 104.65pt;" valign="top" width="140"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 150.0pt;" valign="top" width="200"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.6pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">22,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 58.85pt;" valign="top" width="78"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 22.15pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">22,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 15.8pt; mso-yfti-irow: 4; mso-yfti-lastrow: yes;"> <td colspan="3" style="height: 15.8pt; padding: 0in 0in 0in 0in; width: 313.5pt;" valign="top" width="418"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 87.75pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Adjusted<span style="letter-spacing: -.2pt;"> </span>Profit<span style="letter-spacing: -.2pt;"> </span>& Loss<span style="letter-spacing: -.15pt;"> </span>A/c</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></div><!--[if !mso]--></td> </tr>
</tbody></table></span><!--[endif]--><!--[if !mso & !vml]--> <!--[endif]--><!--[if !vml]--></td> </tr>
</tbody></table><!--[endif]--><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">80,000<span style="mso-tab-count: 1;"> </span>80,000</span><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span><br />
<div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 11.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 16.0pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 15.0pt; mso-yfti-irow: 0;"> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 15.0pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 159.4pt;" valign="top" width="213"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">To<span style="letter-spacing: -.15pt;"> </span>Transfer<span style="letter-spacing: -.15pt;"> </span>to<span style="letter-spacing: -.15pt;"> </span>general<span style="letter-spacing: -.15pt;"> </span>reserve<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 15.0pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.0pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">8,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 15.0pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.7pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">By<span style="letter-spacing: -.25pt;"> </span>Balance<span style="letter-spacing: -.25pt;"> </span>b/d<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 15.0pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.4pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 20.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">32,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 1;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 159.4pt;" valign="top" width="213"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">To<span style="letter-spacing: -.35pt;"> </span>Provision<span style="letter-spacing: -.35pt;"> </span>for<span style="letter-spacing: -.35pt;"> </span>tax<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.0pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 18.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">38,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.7pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">By<span style="letter-spacing: -.3pt;"> </span>Fund<span style="letter-spacing: -.3pt;"> </span>from<span style="letter-spacing: -.3pt;"> </span>operation<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.4pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 20.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">72,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 2;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 159.4pt;" valign="top" width="213"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">To<span style="letter-spacing: -.5pt;"> </span>depreciation<span style="letter-spacing: -.5pt;"> </span>on:<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.0pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.7pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.4pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 3;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 159.4pt;" valign="top" width="213"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt; letter-spacing: .5pt;">-</span><span style="font-family: "Times New Roman"; font-size: 10.0pt;">plant<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.0pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">8,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.7pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.4pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 4;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 159.4pt;" valign="top" width="213"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt; letter-spacing: .5pt;">-</span><span style="font-family: "Times New Roman"; font-size: 10.0pt; letter-spacing: -.05pt;">Building</span><span style="font-family: "Times New Roman"; font-size: 10.0pt;"><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.0pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">8,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.7pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.4pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 5;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 159.4pt;" valign="top" width="213"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">To<span style="letter-spacing: -.35pt;"> </span>Interim<span style="letter-spacing: -.35pt;"> </span>dividend<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.0pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 18.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">16,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.7pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.4pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 6;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 159.4pt;" valign="top" width="213"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">To<span style="letter-spacing: -.3pt;"> </span>Balance<span style="letter-spacing: -.3pt;"> </span>c/d<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.0pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 18.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">26,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.7pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.4pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 7; mso-yfti-lastrow: yes;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 159.4pt;" valign="top" width="213"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.0pt;" valign="top" width="76"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.35pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">1,04,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 132.7pt;" valign="top" width="177"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 57.4pt;" valign="top" width="77"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">1,04,000<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: 11.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .95pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
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</div><div class="MsoNormal" style="line-height: 10.0pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
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</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 147.0pt;" valign="top" width="196"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">Tax<span style="letter-spacing: -.65pt;"> </span>paid<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.35pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.6pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">34,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 1;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 147.0pt;" valign="top" width="196"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">Purchase<span style="letter-spacing: -.25pt;"> </span>of<span style="letter-spacing: -.25pt;"> </span>inve<span style="letter-spacing: -.05pt;">stment</span><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.35pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 17.6pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">2,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 2;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 147.0pt;" valign="top" width="196"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">Interim<span style="letter-spacing: -.25pt;"> </span>dividend<span style="letter-spacing: -.25pt;"> </span>paid<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.35pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.6pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">16,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 3;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 147.0pt;" valign="top" width="196"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">Increase<span style="letter-spacing: -.2pt;"> </span>in<span style="letter-spacing: -.2pt;"> </span>working<span style="letter-spacing: -.2pt;"> </span>capital<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.35pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.6pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">14,000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-yfti-irow: 4; mso-yfti-lastrow: yes;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 170.65pt;" valign="top" width="228"> <div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 5.65pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: right; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">72,000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 147.0pt;" valign="top" width="196"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 48.35pt;" valign="top" width="64"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.6pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 10.0pt;">72,000<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: 9.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .2pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-88824905868944572422011-06-20T01:52:00.000-07:002011-06-20T01:52:08.942-07:00“Accounting is closely connected with control”. Elaborate the statement and discuss the role of accounting feedback in the process of ...<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal" style="line-height: 102%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 41.0pt; margin-right: 5.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-autospace: none; text-indent: -.5in;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 102%;">“Accounting<span style="letter-spacing: .8pt;"> </span>is<span style="letter-spacing: .85pt;"> </span>closely<span style="letter-spacing: .85pt;"> </span>connected<span style="letter-spacing: .85pt;"> </span>with<span style="letter-spacing: .8pt;"> </span>control”.<span style="letter-spacing: .8pt;"> </span>Elaborate<span style="letter-spacing: .8pt;"> </span>the<span style="letter-spacing: .85pt;"> </span>statement<span style="letter-spacing: .8pt;"> </span>and discuss<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>role<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>accounting<span style="letter-spacing: -.05pt;"> </span>feedback<span style="letter-spacing: -.05pt;"> </span>in<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>process<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>control.</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 102%;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 102%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 41.0pt; margin-right: 5.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-autospace: none; text-indent: -.5in;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 102%;"><br />
</span></b></div><div class="MsoNormal" style="line-height: 13.05pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 5.3pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Sol<span style="letter-spacing: 2.05pt;"> </span>One<span style="letter-spacing: 2.8pt;"> </span>of<span style="letter-spacing: 2.55pt;"> </span>the<span style="letter-spacing: 2.65pt;"> </span>major<span style="letter-spacing: 3.0pt;"> </span>tasks<span style="letter-spacing: 2.85pt;"> </span>of<span style="letter-spacing: 2.55pt;"> </span>the<span style="letter-spacing: 2.65pt;"> </span>management<span style="letter-spacing: 1.05pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">is<span style="letter-spacing: 2.0pt;"> </span>to<span style="letter-spacing: 2.4pt;"> </span>control<span style="letter-spacing: 2.65pt;"> </span>the<span style="letter-spacing: 2.45pt;"> </span>operations<span style="letter-spacing: 2.8pt;"> </span>of<span style="letter-spacing: 2.4pt;"> </span><span style="mso-font-width: 101%;">an</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.65pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">organisation.<span style="mso-spacerun: yes;"> </span>Control<span style="letter-spacing: 1.95pt;"> </span>can<span style="letter-spacing: 1.15pt;"> </span>be<span style="letter-spacing: .95pt;"> </span>easily<span style="letter-spacing: 1.65pt;"> </span>understood<span style="letter-spacing: 2.65pt;"> </span>as<span style="letter-spacing: .9pt;"> </span>meaning<span style="letter-spacing: 2.15pt;"> </span>the<span style="letter-spacing: 1.1pt;"> </span>process<span style="letter-spacing: 1.95pt;"> </span>of<span style="letter-spacing: .9pt;"> </span>keeping<span style="letter-spacing: 2.05pt;"> </span><span style="mso-font-width: 104%;">the </span>organisation on its planned course. This process of ensuring that the organisation is on course,<span style="letter-spacing: .85pt;"> </span>involves<span style="letter-spacing: .85pt;"> </span>measurement.<span style="letter-spacing: .85pt;"> </span>Accounting<span style="letter-spacing: .85pt;"> </span>is<span style="letter-spacing: .85pt;"> </span>closely<span style="letter-spacing: 1.0pt;"> </span>connected<span style="letter-spacing: 1.65pt;"> </span>with<span style="letter-spacing: 1.15pt;"> </span>the<span style="letter-spacing: 1.0pt;"> </span>control<span style="letter-spacing: 1.4pt;"> </span><span style="mso-font-width: 102%;">system </span>in <span style="letter-spacing: 1.0pt;"><span style="mso-spacerun: yes;"> </span></span>an <span style="letter-spacing: 1.1pt;"><span style="mso-spacerun: yes;"> </span></span>organisation<span style="mso-spacerun: yes;"> </span>in <span style="letter-spacing: 1.0pt;"><span style="mso-spacerun: yes;"> </span></span>that <span style="letter-spacing: 1.35pt;"><span style="mso-spacerun: yes;"> </span></span>it <span style="letter-spacing: .9pt;"><span style="mso-spacerun: yes;"> </span></span>provides <span style="letter-spacing: 2.3pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: 1.2pt;"><span style="mso-spacerun: yes;"> </span></span>measurement<span style="mso-spacerun: yes;"> </span><span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>system <span style="letter-spacing: 1.95pt;"><span style="mso-spacerun: yes;"> </span></span>and <span style="letter-spacing: 1.3pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: 1.2pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 104%;">required </span>information <span style="letter-spacing: 1.0pt;"><span style="mso-spacerun: yes;"> </span></span>to<span style="letter-spacing: 2.1pt;"> </span>the<span style="letter-spacing: 2.35pt;"> </span>controller <span style="letter-spacing: .6pt;"><span style="mso-spacerun: yes;"> </span></span>for<span style="letter-spacing: 2.3pt;"> </span>ensuring <span style="letter-spacing: .4pt;"><span style="mso-spacerun: yes;"> </span></span>that<span style="letter-spacing: 2.45pt;"> </span>the<span style="letter-spacing: 2.35pt;"> </span>organisation <span style="letter-spacing: 1.1pt;"><span style="mso-spacerun: yes;"> </span></span>is<span style="letter-spacing: 2.05pt;"> </span>on<span style="letter-spacing: 2.25pt;"> </span>its<span style="letter-spacing: 2.2pt;"> </span>course<span style="mso-spacerun: yes;"> </span><span style="mso-font-width: 104%;">and </span>making<span style="letter-spacing: -.15pt;"> </span>corrections<span style="letter-spacing: -.15pt;"> </span>whenever<span style="letter-spacing: -.15pt;"> </span>required.<o:p></o:p></span></div><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">This<span style="letter-spacing: 2.4pt;"> </span>process<span style="letter-spacing: 2.4pt;"> </span><span style="letter-spacing: -.05pt;">c</span>an<span style="letter-spacing: 2.3pt;"> </span>be<span style="letter-spacing: 2.25pt;"> </span>easily<span style="letter-spacing: 2.45pt;"> </span>visualised<span style="letter-spacing: .45pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">by<span style="letter-spacing: 1.95pt;"> </span>having<span style="letter-spacing: 2.35pt;"> </span>a<span style="letter-spacing: 1.8pt;"> </span>look<span style="letter-spacing: 2.15pt;"> </span>at<span style="letter-spacing: 1.85pt;"> </span>the<span style="letter-spacing: 2.0pt;"> </span>structure<span style="letter-spacing: 2.55pt;"> </span>of<span style="letter-spacing: 1.9pt;"> </span>a<span style="letter-spacing: 1.8pt;"> </span><span style="mso-font-width: 102%;">control </span>system in an organisation. Look at the control system given in Fig. 1.7. You know that an organisation <span style="letter-spacing: 1.15pt;"><span style="mso-spacerun: yes;"> </span></span>is<span style="letter-spacing: 2.1pt;"> </span>made<span style="letter-spacing: 2.85pt;"> </span>up<span style="letter-spacing: 2.3pt;"> </span>of<span style="letter-spacing: 2.2pt;"> </span>interrelated <span style="letter-spacing: 1.0pt;"><span style="mso-spacerun: yes;"> </span></span>parts<span style="letter-spacing: 2.75pt;"> </span>and<span style="letter-spacing: 2.5pt;"> </span>is<span style="letter-spacing: 2.1pt;"> </span>linked<span style="mso-spacerun: yes;"> </span>to<span style="letter-spacing: 2.15pt;"> </span>the<span style="letter-spacing: 2.4pt;"> </span>environment. <span style="letter-spacing: 1.35pt;"><span style="mso-spacerun: yes;"> </span></span><span style="mso-font-width: 104%;">The </span>organisation<span style="letter-spacing: .55pt;"> </span>depends<span style="letter-spacing: 1.55pt;"> </span>on<span style="letter-spacing: .7pt;"> </span>the<span style="letter-spacing: .95pt;"> </span>environment<span style="letter-spacing: 2.75pt;"> </span>for<span style="letter-spacing: .75pt;"> </span>its<span style="letter-spacing: .8pt;"> </span>inputs<span style="letter-spacing: 1.25pt;"> </span>and<span style="letter-spacing: .85pt;"> </span>for<span style="letter-spacing: .75pt;"> </span>disposing<span style="letter-spacing: 1.75pt;"> </span>off<span style="letter-spacing: .75pt;"> </span>its<span style="letter-spacing: .8pt;"> </span><span style="mso-font-width: 103%;">output. </span>The<span style="letter-spacing: .35pt;"> </span>process<span style="letter-spacing: 1.05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>control<span style="letter-spacing: 1.0pt;"> </span>implies<span style="letter-spacing: 1.05pt;"> </span>that<span style="letter-spacing: .35pt;"> </span>we<span style="letter-spacing: .2pt;"> </span>have<span style="letter-spacing: .55pt;"> </span>to measure<span style="letter-spacing: 1.2pt;"> </span>the<span style="letter-spacing: .2pt;"> </span>inputs,<span style="letter-spacing: .9pt;"> </span>processes<span style="letter-spacing: 1.45pt;"> </span>and<span style="letter-spacing: .3pt;"> </span><span style="mso-font-width: 104%;">the </span>output. Environment, which provides the input, would impose output standards, such as will<span style="letter-spacing: .8pt;"> </span>he acceptable<span style="letter-spacing: 2.0pt;"> </span>in<span style="letter-spacing: .35pt;"> </span>exchange<span style="letter-spacing: 1.8pt;"> </span>for<span style="letter-spacing: .55pt;"> </span>providing<span style="letter-spacing: 1.85pt;"> </span>the<span style="letter-spacing: .6pt;"> </span>inputs.<span style="letter-spacing: 1.3pt;"> </span>The<span style="letter-spacing: .75pt;"> </span>control.<span style="letter-spacing: 1.5pt;"> </span>therefore,<span style="letter-spacing: 1.85pt;"> </span><span style="mso-font-width: 104%;">would </span>imply measurement comparisons and feedback. The process of evaluation brings out the deviations,<span style="letter-spacing: -.15pt;"> </span>which<span style="letter-spacing: -.15pt;"> </span>provide<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.15pt;"> </span>basis<span style="letter-spacing: -.15pt;"> </span>for<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.15pt;"> </span>feedback.</span><br />
<span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br />
</span><br />
<span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"></span><br />
<div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">From<span style="letter-spacing: 2.8pt;"> </span>the<span style="letter-spacing: 2.65pt;"> </span>figure<span style="letter-spacing: 2.8pt;"> </span>above,<span style="letter-spacing: 2.85pt;"> </span>it<span style="letter-spacing: 2.65pt;"> </span>is<span style="letter-spacing: 2.65pt;"> </span>obvious<span style="letter-spacing: .2pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">that<span style="letter-spacing: 2.1pt;"> </span>the<span style="letter-spacing: 2.05pt;"> </span>controller<span style="letter-spacing: 2.7pt;"> </span>(accountant)<span style="letter-spacing: 2.95pt;"> </span>and<span style="letter-spacing: 2.1pt;"> </span><span style="mso-font-width: 102%;">managers </span>obtain<span style="letter-spacing: 1.8pt;"> </span>such<span style="letter-spacing: 1.5pt;"> </span>information,<span style="mso-spacerun: yes;"> </span>which<span style="letter-spacing: 1.8pt;"> </span>enables<span style="letter-spacing: 2.05pt;"> </span>them<span style="letter-spacing: 1.55pt;"> </span>to<span style="letter-spacing: 1.0pt;"> </span>diagnose<span style="letter-spacing: 2.3pt;"> </span>the<span style="letter-spacing: 1.2pt;"> </span>situation.<span style="letter-spacing: 2.4pt;"> </span>They<span style="letter-spacing: 1.6pt;"> </span>are<span style="letter-spacing: 1.2pt;"> </span>in<span style="letter-spacing: 1.0pt;"> </span><span style="mso-font-width: 104%;">a </span>position<span style="letter-spacing: -.1pt;"> </span>to<span style="letter-spacing: -.1pt;"> </span>identify<span style="letter-spacing: -.1pt;"> </span>and<span style="letter-spacing: -.1pt;"> </span>define<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>problem.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .85pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.75pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">Let<span style="letter-spacing: .35pt;"> </span>us<span style="letter-spacing: .3pt;"> </span>try<span style="letter-spacing: .35pt;"> </span>to<span style="letter-spacing: .3pt;"> </span>identify<span style="letter-spacing: .6pt;"> </span>and<span style="letter-spacing: .4pt;"> </span>d<span style="letter-spacing: -.05pt;">e</span>fine<span style="letter-spacing: .4pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">a problem<span style="letter-spacing: .7pt;"> </span>in<span style="letter-spacing: .1pt;"> </span>a hypothetical<span style="letter-spacing: 1.1pt;"> </span>setting.<span style="letter-spacing: .6pt;"> </span>Suppose<span style="letter-spacing: .7pt;"> </span>you<span style="letter-spacing: .25pt;"> </span><span style="mso-font-width: 102%;">are </span>managing a firm that sells three products. PI, P, and Pia You are now confronted with the problem that the profit of your firm is declining. The falling profit may be due to many reasons. <span style="letter-spacing: .2pt;"><span style="mso-spacerun: yes;"> </span></span>The<span style="letter-spacing: 3.0pt;"> </span>first<span style="letter-spacing: .15pt;"> </span>thing<span style="letter-spacing: 2.15pt;"> </span>you<span style="letter-spacing: 1.95pt;"> </span>would<span style="letter-spacing: 2.3pt;"> </span>like<span style="letter-spacing: 1.95pt;"> </span>to<span style="letter-spacing: 1.7pt;"> </span>do<span style="letter-spacing: 1.75pt;"> </span>is<span style="letter-spacing: 1.65pt;"> </span>to<span style="letter-spacing: 1.7pt;"> </span>identify<span style="letter-spacing: 2.5pt;"> </span>the<span style="letter-spacing: 1.85pt;"> </span>problem<span style="letter-spacing: 2.6pt;"> </span>more<span style="letter-spacing: 2.15pt;"> </span><span style="mso-font-width: 103%;">clearly </span>before<span style="letter-spacing: -.2pt;"> </span>you<span style="letter-spacing: -.2pt;"> </span>set<span style="letter-spacing: -.2pt;"> </span>about<span style="letter-spacing: -.2pt;"> </span>solving<span style="letter-spacing: -.2pt;"> </span>it.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.4pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 114.7pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Some of the possible hypotheses you would like to examine are:</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 181.45pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">•<span style="mso-tab-count: 1;"> </span>All<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.15pt;"> </span>three<span style="letter-spacing: -.15pt;"> </span>products<span style="letter-spacing: -.15pt;"> </span>are<span style="letter-spacing: -.15pt;"> </span>earning<span style="letter-spacing: -.15pt;"> </span>less<span style="letter-spacing: -.15pt;"> </span>money.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 215.95pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">•<span style="mso-tab-count: 1;"> </span>Two<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>products<span style="letter-spacing: -.05pt;"> </span>are<span style="letter-spacing: -.05pt;"> </span>losing<span style="letter-spacing: -.05pt;"> </span>money.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 200.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">•<span style="mso-tab-count: 1;"> </span><span style="letter-spacing: .15pt;">On</span>ly<span style="letter-spacing: -.1pt;"> </span>one<span style="letter-spacing: -.1pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>products<span style="letter-spacing: -.1pt;"> </span>is<span style="letter-spacing: -.1pt;"> </span>losing<span style="letter-spacing: -.1pt;"> </span>money.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 31.5pt; margin-top: .45pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 41.0pt; text-align: justify; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">•<span style="mso-tab-count: 1;"> </span>Some<span style="letter-spacing: -.05pt;"> </span>products<span style="letter-spacing: -.1pt;"> </span>are<span style="letter-spacing: -.1pt;"> </span>earning<span style="letter-spacing: -.1pt;"> </span>more<span style="letter-spacing: -.05pt;"> </span>money.<span style="letter-spacing: -.1pt;"> </span>but<span style="letter-spacing: -.1pt;"> </span>others<span style="letter-spacing: -.05pt;"> </span>are<span style="letter-spacing: -.05pt;"> </span>losing<span style="letter-spacing: -.05pt;"> </span>more<span style="letter-spacing: -.1pt;"> </span>than<span style="letter-spacing: -.05pt;"> </span>that.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .2pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">You<span style="letter-spacing: .6pt;"> </span>can<span style="letter-spacing: .6pt;"> </span>go<span style="letter-spacing: .5pt;"> </span>on<span style="letter-spacing: .55pt;"> </span>and<span style="letter-spacing: .6pt;"> </span>on<span style="letter-spacing: .55pt;"> </span>when<span style="letter-spacing: .65pt;"> </span>you<span style="letter-spacing: .6pt;"> </span>really<span style="letter-spacing: .6pt;"> </span></span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 100%;">attempt<span style="letter-spacing: 1.05pt;"> </span>a<span style="letter-spacing: .45pt;"> </span>blind<span style="letter-spacing: .85pt;"> </span>search.<span style="letter-spacing: 1.0pt;"> </span>But<span style="letter-spacing: .7pt;"> </span>in<span style="letter-spacing: .55pt;"> </span>practice,<span style="letter-spacing: 1.15pt;"> </span>it<span style="letter-spacing: .5pt;"> </span><span style="mso-font-width: 102%;">can't </span>be<span style="letter-spacing: .1pt;"> </span>that<span style="letter-spacing: .25pt;"> </span>bad.<span style="letter-spacing: .3pt;"> </span>You<span style="letter-spacing: .3pt;"> </span>will<span style="letter-spacing: .25pt;"> </span>he<span style="letter-spacing: .1pt;"> </span>able<span style="letter-spacing: .3pt;"> </span>to<span style="letter-spacing: .1pt;"> </span>zero<span style="letter-spacing: .3pt;"> </span>in<span style="letter-spacing: .1pt;"> </span>on<span style="letter-spacing: .15pt;"> </span>a more<span style="letter-spacing: .5pt;"> </span>focused<span style="letter-spacing: .35pt;"> </span>questioning.<span style="letter-spacing: .6pt;"> </span>The<span style="letter-spacing: .2pt;"> </span><span style="mso-font-width: 101%;">summarised </span>accounting<span style="letter-spacing: -.05pt;"> </span>information<span style="letter-spacing: -.05pt;"> </span>triggering<span style="letter-spacing: -.05pt;"> </span>these<span style="letter-spacing: -.05pt;"> </span>questions<span style="letter-spacing: -.05pt;"> </span>is<span style="letter-spacing: -.05pt;"> </span>provided<span style="letter-spacing: -.05pt;"> </span>in<span style="letter-spacing: -.05pt;"> </span>Table<span style="letter-spacing: -.05pt;"> </span>1.3.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 4.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><br />
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fillcolor="black" stroked="f"> <v:path arrowok="t"/> </v:shape><w:wrap anchorx="page"/> </v:group><![endif]--><b><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Table<span style="letter-spacing: -.1pt;"> </span>1<span style="letter-spacing: -.1pt;"> </span>Summarised<span style="letter-spacing: -.1pt;"> </span>income<span style="letter-spacing: -.1pt;"> </span>Statement</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 68.0pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 14.25pt; mso-row-margin-right: 6.0pt; mso-yfti-irow: 0;"> <td colspan="2" style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 148.15pt;" valign="top" width="198"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 77.6pt;" valign="top" width="103"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 28.1pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Year<span style="letter-spacing: -.7pt;"> </span>1<o:p></o:p></span></div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border-left: none; border-right: none; border-top: solid black 1.0pt; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 78.75pt;" valign="top" width="105"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 27.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Year<span style="letter-spacing: -.7pt;"> </span>2<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="8"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 28.5pt; mso-row-margin-right: 6.0pt; mso-yfti-irow: 1;"> <td colspan="2" style="border-bottom: solid black 1.0pt; border: none; height: 28.5pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 148.15pt;" valign="top" width="198"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Sales<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Less:<span style="letter-spacing: -.15pt;"> </span>cost<span style="letter-spacing: -.15pt;"> </span>of<span style="letter-spacing: -.15pt;"> </span>goods<span style="letter-spacing: -.15pt;"> </span>sold<o:p></o:p></span></div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border: none; height: 28.5pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 77.6pt;" valign="top" width="103"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border: none; height: 28.5pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 78.75pt;" valign="top" width="105"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .25in; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Rs.<span style="letter-spacing: -.45pt;"> </span>1000<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 13.5pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 42.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">400<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="8"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 14.3pt; mso-row-margin-right: 6.0pt; mso-yfti-irow: 2;"> <td colspan="2" style="border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 148.15pt;" valign="top" width="198"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Gross<span style="letter-spacing: -.5pt;"> </span>margin<o:p></o:p></span></div></td> <td colspan="2" style="border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 77.6pt;" valign="top" width="103"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 35.6pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">600<o:p></o:p></span></div></td> <td colspan="2" style="border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 78.75pt;" valign="top" width="105"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 42.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">500<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="8"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 17.75pt; mso-row-margin-right: 6.0pt; mso-yfti-irow: 3;"> <td colspan="2" style="height: 17.75pt; padding: 0in 0in 0in 0in; width: 148.15pt;" valign="top" width="198"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Less:<span style="letter-spacing: -1.05pt;"> </span>Depreciation<o:p></o:p></span></div></td> <td colspan="2" style="height: 17.75pt; padding: 0in 0in 0in 0in; width: 77.6pt;" valign="top" width="103"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 35.6pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">200<o:p></o:p></span></div></td> <td colspan="2" style="height: 17.75pt; padding: 0in 0in 0in 0in; width: 78.75pt;" valign="top" width="105"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 42.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">200<o:p></o:p></span></div></td> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="8"><div class="MsoNormal"><br />
</div></td> </tr>
<tr style="height: 17.7pt; mso-row-margin-left: 6.0pt; mso-yfti-irow: 4;"> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="8"><div class="MsoNormal"><br />
</div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border: none; height: 17.7pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 153.75pt;" valign="top" width="205"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 19.9pt; margin-right: 0in; margin-top: 3.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Other<span style="letter-spacing: -.05pt;"> </span>operating<span style="letter-spacing: -.05pt;"> </span>expenses<o:p></o:p></span></div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border: none; height: 17.7pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 30.0pt; margin-right: 0in; margin-top: 3.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">100<o:p></o:p></span></div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border: none; height: 17.7pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 78.75pt;" valign="top" width="105"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 42.0pt; margin-right: 0in; margin-top: 3.45pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">100<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.25pt; mso-row-margin-left: 6.0pt; mso-yfti-irow: 5; mso-yfti-lastrow: yes;"> <td style="border: none; mso-cell-special: placeholder; padding: 0in 0in 0in 0in;" width="8"><div class="MsoNormal"><br />
</div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 153.75pt;" valign="top" width="205"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 1.0in;" valign="top" width="96"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 12.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Rs.<span style="letter-spacing: -.5pt;"> </span>300<o:p></o:p></span></div></td> <td colspan="2" style="border-bottom: solid black 1.0pt; border: none; height: 14.25pt; mso-border-bottom-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 78.75pt;" valign="top" width="105"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Rs.<span style="letter-spacing: -.5pt;"> </span>200<o:p></o:p></span></div></td> </tr>
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</div><div class="MsoNormal" style="line-height: 100%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 24.2pt; margin-top: 1.45pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><!--[if gte vml 1]><v:group
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</div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 56.75pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 14.3pt; mso-yfti-irow: 0;"> <td style="border-top: solid black 1.0pt; border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 127.9pt;" valign="top" width="171"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-top: solid black 1.0pt; border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 7.85pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">P1</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-top: solid black 1.0pt; border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 35.65pt;" valign="top" width="48"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">P2</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-top: solid black 1.0pt; border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">P3</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-top: solid black 1.0pt; border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.9pt;" valign="top" width="47"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">P1</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-top: solid black 1.0pt; border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">P2</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> <td style="border-top: solid black 1.0pt; border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt; letter-spacing: .05pt;">P3</span><span style="font-family: "Times New Roman"; font-size: 12.0pt;"><o:p></o:p></span></div></td> </tr>
<tr style="height: 13.45pt; mso-yfti-irow: 1;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 127.9pt;" valign="top" width="171"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Sales<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 7.85pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">300<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 35.65pt;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">300<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">400<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.9pt;" valign="top" width="47"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">400<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">400<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">200<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.3pt; mso-yfti-irow: 2;"> <td style="border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 127.9pt;" valign="top" width="171"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Less:<span style="letter-spacing: -.15pt;"> </span>cost<span style="letter-spacing: -.15pt;"> </span>of<span style="letter-spacing: -.15pt;"> </span>goods<span style="letter-spacing: -.15pt;"> </span>sold<o:p></o:p></span></div></td> <td style="border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 7.85pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">150<o:p></o:p></span></div></td> <td style="border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 35.65pt;" valign="top" width="48"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">150<o:p></o:p></span></div></td> <td style="border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">100<o:p></o:p></span></div></td> <td style="border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.9pt;" valign="top" width="47"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">200<o:p></o:p></span></div></td> <td style="border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">200<o:p></o:p></span></div></td> <td style="border: none; height: 14.3pt; mso-border-top-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">100<o:p></o:p></span></div></td> </tr>
<tr style="height: 13.45pt; mso-yfti-irow: 3; mso-yfti-lastrow: yes;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 127.9pt;" valign="top" width="171"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">Gross<span style="letter-spacing: -.5pt;"> </span>margin<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 7.85pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">150<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 35.65pt;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.0pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">150<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">300<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.9pt;" valign="top" width="47"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: 34.85pt;" valign="top" width="46"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.65pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">200<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border: none; height: 13.45pt; mso-border-bottom-alt: solid black .25pt; padding: 0in 0in 0in 0in; width: .5in;" valign="top" width="48"> <div class="MsoNormal" style="line-height: 13.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 8.25pt; margin-right: 0in; margin-top: 0in; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><span style="font-family: "Times New Roman"; font-size: 12.0pt;">100<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="line-height: 12.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: .7pt; mso-layout-grid-align: none; mso-line-height-rule: exactly; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="line-height: 99%; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: 24.15pt; margin-top: 1.55pt; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">Sales<span style="letter-spacing: .35pt;"> </span>of<span style="letter-spacing: .35pt;"> </span>P,<span style="letter-spacing: .35pt;"> </span>and<span style="letter-spacing: .35pt;"> </span>F,<span style="letter-spacing: .35pt;"> </span>have<span style="letter-spacing: .35pt;"> </span>increased</span></b><span style="font-family: "Times New Roman"; font-size: 12.0pt; line-height: 99%;">. The costs<span style="letter-spacing: .4pt;"> </span>of<span style="letter-spacing: .4pt;"> </span>sales<span style="letter-spacing: .4pt;"> </span>of<span style="letter-spacing: .4pt;"> </span>these<span style="letter-spacing: .4pt;"> </span>products<span style="letter-spacing: .4pt;"> </span>have<span style="letter-spacing: .4pt;"> </span>retained<span style="letter-spacing: .4pt;"> </span>the same relationship with the sales. Sales of PI have decreased. The ratio of cost of sales to sales<span style="letter-spacing: 2.7pt;"> </span>of<span style="letter-spacing: 2.3pt;"> </span>P3<span style="letter-spacing: 2.4pt;"> </span>has<span style="letter-spacing: 2.5pt;"> </span>doubled. <span style="letter-spacing: .25pt;"><span style="mso-spacerun: yes;"> </span></span>We<span style="letter-spacing: 2.5pt;"> </span>now<span style="letter-spacing: 2.65pt;"> </span>have<span style="letter-spacing: 2.7pt;"> </span>a<span style="letter-spacing: 2.2pt;"> </span>clearly<span style="mso-spacerun: yes;"> </span>identified <span style="letter-spacing: .4pt;"><span style="mso-spacerun: yes;"> </span></span>proble<span style="letter-spacing: -.7pt;">m</span>. <span style="letter-spacing: 1.35pt;"><span style="mso-spacerun: yes;"> </span></span>At <span style="letter-spacing: .15pt;"><span style="mso-spacerun: yes;"> </span></span>this <span style="letter-spacing: .15pt;"><span style="mso-spacerun: yes;"> </span></span>stage, managers<span style="letter-spacing: .75pt;"> </span>step<span style="letter-spacing: .5pt;"> </span>in.<span style="letter-spacing: .4pt;"> </span>Thus,<span style="letter-spacing: .55pt;"> </span>the<span style="letter-spacing: .45pt;"> </span>func<span style="letter-spacing: -.05pt;">t</span>ion<span style="letter-spacing: 1.0pt;"> </span>of<span style="letter-spacing: .75pt;"> </span>accounting<span style="letter-spacing: .75pt;"> </span>as<span style="letter-spacing: .75pt;"> </span>an<span style="letter-spacing: .75pt;"> </span>information<span style="letter-spacing: .75pt;"> </span>processing<span style="letter-spacing: .75pt;"> </span>system, is<span style="letter-spacing: -.05pt;"> </span>to<span style="letter-spacing: -.05pt;"> </span>provide<span style="letter-spacing: -.05pt;"> </span>information<span style="letter-spacing: -.05pt;"> </span>to<span style="letter-spacing: -.05pt;"> </span>decision<span style="letter-spacing: -.05pt;"> </span>makers.<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0tag:blogger.com,1999:blog-6717078704597438349.post-70084455935582184262011-06-18T05:40:00.000-07:002011-06-18T05:40:11.198-07:00What role is played by a financial manager in matter of dividend policy. Discuss the alternatives that he might consider and the factors which he should take into consideration before finalizing his views on dividend policy?<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="Section1"> <div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-size: 10.0pt;">What<span style="mso-spacerun: yes;"> </span>role<span style="mso-spacerun: yes;"> </span>is<span style="mso-spacerun: yes;"> </span>played<span style="mso-spacerun: yes;"> </span>by<span style="mso-spacerun: yes;"> </span>a<span style="mso-spacerun: yes;"> </span>financi<span style="letter-spacing: -.05pt;">a</span>l <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>manager <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>in <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>matter <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>of <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>dividend <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>policy. Discuss the alternatives that he might consider<span style="letter-spacing: .05pt;"> </span>and<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>factors<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">w</span>hich<span style="letter-spacing: .05pt;"> </span>he<span style="letter-spacing: .05pt;"> </span>should<span style="letter-spacing: .05pt;"> </span>take into consideration before finali<span style="letter-spacing: -.1pt;">z</span>ing his vie<span style="letter-spacing: -.1pt;">w</span>s on dividend policy?</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.75pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">A financial <span style="letter-spacing: -.1pt;">m</span>anager is a person who is respon<span style="letter-spacing: -.05pt;">s</span>ible<span style="letter-spacing: .05pt;"> </span>in<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>significant<span style="letter-spacing: .05pt;"> </span>way<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span>carry<span style="letter-spacing: .05pt;"> </span>out<span style="letter-spacing: .05pt;"> </span>the finance<span style="letter-spacing: .05pt;"> </span>functions.<span style="letter-spacing: .05pt;"> </span>In<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">m</span>odern<span style="letter-spacing: .05pt;"> </span>organization a<span style="letter-spacing: .15pt;"> </span>financial<span style="letter-spacing: .15pt;"> </span><span style="letter-spacing: -.1pt;">m</span>anager<span style="letter-spacing: .15pt;"> </span>occupies<span style="letter-spacing: .15pt;"> </span>a<span style="letter-spacing: .15pt;"> </span>key<span style="letter-spacing: .15pt;"> </span>position. He or she is one of the <span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">e</span><span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: -.05pt;">b</span>ers<span style="letter-spacing: .1pt;"> </span>of<span style="letter-spacing: .1pt;"> </span>the<span style="letter-spacing: .1pt;"> </span>top<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.1pt;">m</span>anage<span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: .1pt;"> </span>tea<span style="letter-spacing: -.1pt;">m</span>,<span style="letter-spacing: .1pt;"> </span>and<span style="letter-spacing: .1pt;"> </span>his<span style="letter-spacing: .1pt;"> </span>or<span style="letter-spacing: .1pt;"> </span>her<span style="letter-spacing: .1pt;"> </span>role,<span style="letter-spacing: .1pt;"> </span>day-by- day<span style="mso-spacerun: yes;"> </span>is<span style="mso-spacerun: yes;"> </span>beco<span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">i</span>ng<span style="mso-spacerun: yes;"> </span><span style="letter-spacing: -.1pt;">m</span>ore<span style="mso-spacerun: yes;"> </span>pervasive,<span style="mso-spacerun: yes;"> </span>inten<span style="letter-spacing: -.05pt;">s</span>ive<span style="mso-spacerun: yes;"> </span>and<span style="mso-spacerun: yes;"> </span>significant<span style="mso-spacerun: yes;"> </span>in<span style="mso-spacerun: yes;"> </span>solving<span style="mso-spacerun: yes;"> </span>co<span style="letter-spacing: -.1pt;">m</span>plex <span style="letter-spacing: -.1pt;">m</span>anag<span style="letter-spacing: .05pt;">e</span><span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: .05pt;"> </span>proble<span style="letter-spacing: -.1pt;">m</span>s.<span style="letter-spacing: .05pt;"> </span>The<span style="letter-spacing: .05pt;"> </span>finance<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">m</span>anager<span style="letter-spacing: .05pt;"> </span>is responsible<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span>shaping the<span style="letter-spacing: .1pt;"> </span>fortunes<span style="letter-spacing: .1pt;"> </span>of<span style="letter-spacing: .1pt;"> </span>the organization and<span style="letter-spacing: .1pt;"> </span>is<span style="letter-spacing: .1pt;"> </span>involved<span style="letter-spacing: .1pt;"> </span>in<span style="letter-spacing: .1pt;"> </span>the<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ost<span style="letter-spacing: .1pt;"> </span>vital<span style="letter-spacing: .1pt;"> </span>decisions<span style="letter-spacing: .1pt;"> </span>of<span style="letter-spacing: .1pt;"> </span>the<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.05pt;">a</span>llocation<span style="letter-spacing: .1pt;"> </span>of<span style="letter-spacing: .1pt;"> </span>capital.<span style="letter-spacing: .1pt;"> </span>He ensures that the funds of the enterprise are utilized in the <span style="letter-spacing: -.1pt;">m</span>ost efficient <span style="letter-spacing: -.1pt;">m</span>anner.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.8pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">Financial <span style="letter-spacing: -.1pt;">m</span>anagers plan, organize, direct, <span style="letter-spacing: -.05pt;">c</span>ontrol and evaluate the operation<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>financial and<span style="letter-spacing: .1pt;"> </span>accounting<span style="letter-spacing: .1pt;"> </span>depart<span style="letter-spacing: -.1pt;">m</span>ents.<span style="letter-spacing: .1pt;"> </span>They<span style="letter-spacing: .1pt;"> </span>develop and<span style="letter-spacing: .15pt;"> </span>i<span style="letter-spacing: -.1pt;">m</span>ple<span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: .15pt;"> </span>the<span style="letter-spacing: .15pt;"> </span>financial<span style="letter-spacing: .15pt;"> </span>policies<span style="letter-spacing: .15pt;"> </span>and syste<span style="letter-spacing: -.1pt;">m</span>s of establish<span style="letter-spacing: -.1pt;">m</span>ents. Financial <span style="letter-spacing: -.1pt;">m</span>an<span style="letter-spacing: -.05pt;">a</span>gers establish perfor<span style="letter-spacing: -.1pt;">m</span>ance standards and prepare<span style="letter-spacing: .05pt;"> </span>various<span style="letter-spacing: .05pt;"> </span>financial<span style="letter-spacing: .05pt;"> </span>reports<span style="letter-spacing: .05pt;"> </span>for<span style="letter-spacing: .05pt;"> </span>senior <span style="letter-spacing: -.1pt;">m</span>anage<span style="letter-spacing: -.1pt;">m</span>ent.<span style="letter-spacing: .1pt;"> </span>They<span style="letter-spacing: .1pt;"> </span>play<span style="letter-spacing: .1pt;"> </span>a<span style="letter-spacing: .1pt;"> </span>significant<span style="letter-spacing: .1pt;"> </span>role<span style="letter-spacing: .1pt;"> </span>in dividend decision. They are e<span style="letter-spacing: -.1pt;">m</span>ployed in financial<span style="letter-spacing: .05pt;"> </span>and<span style="letter-spacing: .05pt;"> </span>accounting<span style="letter-spacing: .05pt;"> </span>depart<span style="letter-spacing: -.1pt;">m</span>ents<span style="letter-spacing: .05pt;"> </span>in co<span style="letter-spacing: -.1pt;">m</span>panies throughout the private sector and in govern<span style="letter-spacing: -.1pt;">m</span>ent.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 363.15pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">Exa<span style="letter-spacing: -.1pt;">m</span>ple Titles<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 371.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>controller<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 287.25pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>director - financial services<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 312.15pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>director of accounting<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 342.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>finance direct<span style="letter-spacing: -.05pt;">o</span>r<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 291.8pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span><span style="letter-spacing: -.1pt;">m</span>anager, financial control<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 221.8pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span><span style="letter-spacing: -.1pt;">m</span>anager, financial planning and analysis<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 265.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span><span style="letter-spacing: -.1pt;">m</span>anager, internal audit services<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 376.0pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>treas<span style="letter-spacing: -.05pt;">u</span>rer<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 379.15pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">Main duties<o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: always;" /> </span> <div class="Section2"> <div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.0pt; margin-right: 3.95pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 24.0pt; text-align: justify; text-autospace: none; text-indent: -.25in;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Plan,<span style="letter-spacing: 1.35pt;"> </span>organize,<span style="letter-spacing: 1.35pt;"> </span>direct,<span style="letter-spacing: 1.35pt;"> </span>control<span style="letter-spacing: 1.35pt;"> </span>and<span style="letter-spacing: 1.35pt;"> </span>evaluate<span style="letter-spacing: 1.3pt;"> </span>the<span style="letter-spacing: 1.4pt;"> </span>operation<span style="letter-spacing: 1.4pt;"> </span>of<span style="letter-spacing: 1.4pt;"> </span>an<span style="letter-spacing: 1.4pt;"> </span>accounting,<span style="letter-spacing: 1.4pt;"> </span>audit<span style="letter-spacing: 1.4pt;"> </span>or other financial depart<span style="letter-spacing: -.1pt;">m</span>ent<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.0pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none; text-indent: -.25in;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Develop <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>and <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>i<span style="letter-spacing: -.1pt;">m</span>ple<span style="letter-spacing: -.1pt;">m</span>ent <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>financial <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>p<span style="letter-spacing: -.1pt;">o</span>licies, <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>syste<span style="letter-spacing: -.1pt;">m</span>s <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>and <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>proced<span style="letter-spacing: -.05pt;">u</span>res <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>of <span style="letter-spacing: 1.85pt;"><span style="mso-spacerun: yes;"> </span></span>an esta<span style="letter-spacing: -.05pt;">b</span>lish<span style="letter-spacing: -.1pt;">m</span>ent<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.0pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none; text-indent: -.25in;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Prepare<span style="letter-spacing: 1.1pt;"> </span><span style="letter-spacing: -.05pt;">o</span>r<span style="letter-spacing: 1.1pt;"> </span>co-<span style="letter-spacing: -.05pt;">o</span>rdinate<span style="letter-spacing: 1.1pt;"> </span>the<span style="letter-spacing: 1.1pt;"> </span>pre<span style="letter-spacing: -.05pt;">p</span>aration<span style="letter-spacing: 1.1pt;"> </span>of<span style="letter-spacing: 1.05pt;"> </span>financial<span style="letter-spacing: 1.1pt;"> </span>state<span style="letter-spacing: -.1pt;">m</span>ents,<span style="letter-spacing: 1.1pt;"> </span>sum<span style="letter-spacing: -.1pt;">m</span>aries,<span style="letter-spacing: 1.1pt;"> </span>and<span style="letter-spacing: 1.1pt;"> </span>other cost-benefit analyses and financial <span style="letter-spacing: -.1pt;">m</span>anage<span style="letter-spacing: -.1pt;">m</span>ent reports<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.0pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none; text-indent: -.25in;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Co-ordinate <span style="letter-spacing: .4pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .4pt;"><span style="mso-spacerun: yes;"> </span></span>financial <span style="letter-spacing: .4pt;"><span style="mso-spacerun: yes;"> </span></span>planning <span style="letter-spacing: .4pt;"><span style="mso-spacerun: yes;"> </span></span>and <span style="letter-spacing: .35pt;"><span style="mso-spacerun: yes;"> </span></span>budget <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>process, <span style="letter-spacing: .45pt;"><span style="mso-spacerun: yes;"> </span></span>and <span style="letter-spacing: .4pt;"><span style="mso-spacerun: yes;"> </span></span>analyze <span style="letter-spacing: .5pt;"><span style="mso-spacerun: yes;"> </span></span>and <span style="letter-spacing: .5pt;"><span style="mso-spacerun: yes;"> </span></span>correct esti<span style="letter-spacing: -.1pt;">m</span>ates<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 6.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Supervise the develop<span style="letter-spacing: -.1pt;">m</span>ent and i<span style="letter-spacing: -.1pt;">m</span>pleme<span style="letter-spacing: -.1pt;">n</span>tation of financial si<span style="letter-spacing: -.1pt;">m</span>ulation <span style="letter-spacing: -.1pt;">m</span>odels<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.0pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none; text-indent: -.25in;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Evaluate<span style="letter-spacing: .3pt;"> </span>financial<span style="letter-spacing: .3pt;"> </span>reporting<span style="letter-spacing: .3pt;"> </span>syste<span style="letter-spacing: -.1pt;">m</span>s,<span style="letter-spacing: .3pt;"> </span>accou<span style="letter-spacing: -.1pt;">n</span>ting<span style="letter-spacing: .3pt;"> </span>procedures<span style="letter-spacing: .3pt;"> </span>and<span style="letter-spacing: .3pt;"> </span>invest<span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: .3pt;"> </span>activities and<span style="letter-spacing: 1.9pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ake<span style="letter-spacing: 1.9pt;"> </span>recom<span style="letter-spacing: -.1pt;">m</span>endations<span style="letter-spacing: 1.9pt;"> </span>for<span style="letter-spacing: 1.9pt;"> </span>changes<span style="letter-spacing: 1.9pt;"> </span>to<span style="letter-spacing: 1.9pt;"> </span>procedures,<span style="letter-spacing: 1.9pt;"> </span>operating<span style="letter-spacing: 1.9pt;"> </span>syste<span style="letter-spacing: -.1pt;">m</span>s,<span style="letter-spacing: 1.9pt;"> </span>budgets and<span style="letter-spacing: .05pt;"> </span>other<span style="letter-spacing: .05pt;"> </span>financial<span style="letter-spacing: .05pt;"> </span>control<span style="letter-spacing: .05pt;"> </span>functions<span style="letter-spacing: .05pt;"> </span>to senior<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.1pt;">m</span>anagers<span style="letter-spacing: .1pt;"> </span>and<span style="letter-spacing: .1pt;"> </span>other<span style="letter-spacing: .1pt;"> </span>depart<span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: .1pt;"> </span>or regional <span style="letter-spacing: -.1pt;">m</span>anagers<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 6.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Recruit, organize, train and <span style="letter-spacing: -.1pt;">m</span>anage staff<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.0pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none; text-indent: -.25in;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Act<span style="letter-spacing: .45pt;"> </span>as<span style="letter-spacing: .45pt;"> </span>liaison<span style="letter-spacing: .45pt;"> </span>between<span style="letter-spacing: .45pt;"> </span>the<span style="letter-spacing: .45pt;"> </span>organization<span style="letter-spacing: .45pt;"> </span>and<span style="letter-spacing: .35pt;"> </span>its<span style="letter-spacing: .45pt;"> </span>shareholders,<span style="letter-spacing: .45pt;"> </span>the<span style="letter-spacing: .4pt;"> </span>investing<span style="letter-spacing: .45pt;"> </span>public<span style="letter-spacing: .45pt;"> </span>and exter<span style="letter-spacing: -.05pt;">n</span>al financial analy<span style="letter-spacing: -.05pt;">s</span>ts<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.0pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none; text-indent: -.25in;"><span style="font-size: 10.0pt;">•<span style="mso-tab-count: 1;"> </span>Establish<span style="letter-spacing: 1.25pt;"> </span>pro<span style="letter-spacing: -.05pt;">f</span>itability<span style="letter-spacing: 1.25pt;"> </span>stand<span style="letter-spacing: -.05pt;">a</span>rds<span style="letter-spacing: 1.25pt;"> </span><span style="letter-spacing: -.05pt;">f</span>or<span style="letter-spacing: 1.25pt;"> </span>in<span style="letter-spacing: -.05pt;">v</span>est<span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: 1.3pt;"> </span>activities<span style="letter-spacing: 1.3pt;"> </span>and<span style="letter-spacing: 1.3pt;"> </span>handle<span style="letter-spacing: 1.3pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ergers<span style="letter-spacing: 1.3pt;"> </span>and/or acqui<span style="letter-spacing: -.05pt;">s</span>itio<span style="letter-spacing: -.05pt;">n</span>s<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.0pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none; text-indent: -.25in;"><span style="font-size: 10.0pt;">•<span style="mso-tab-count: 1;"> </span>Notify<span style="letter-spacing: .6pt;"> </span>and<span style="letter-spacing: .6pt;"> </span>report<span style="letter-spacing: .6pt;"> </span>to<span style="letter-spacing: .6pt;"> </span>senior<span style="letter-spacing: .6pt;"> </span><span style="letter-spacing: -.1pt;">m</span>anage<span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: .6pt;"> </span>conce<span style="letter-spacing: -.05pt;">r</span>ning<span style="letter-spacing: .6pt;"> </span>any<span style="letter-spacing: .6pt;"> </span>tren<span style="letter-spacing: -.05pt;">d</span>s<span style="letter-spacing: .6pt;"> </span>that<span style="letter-spacing: .6pt;"> </span>are<span style="letter-spacing: .6pt;"> </span>critical<span style="letter-spacing: .6pt;"> </span>to<span style="letter-spacing: .6pt;"> </span>t<span style="letter-spacing: -.05pt;">h</span>e organization<span style="letter-spacing: -.05pt;">'</span>s financial perfor<span style="letter-spacing: -.1pt;">m</span>ance.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; text-autospace: none;"><br />
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</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 338.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-size: 10.0pt;">Dividend Decisions</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">The size and frequency of dividend payments are critical issues in company policy. Dividend policy affects the financial structure, the flow of funds, corporate liquidity, stock prices, and the morale of stockholders. The finance manager plays an important role in the dividend policy.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">The<span style="letter-spacing: .05pt;"> </span>objective<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>dividend<span style="letter-spacing: .05pt;"> </span>policy<span style="letter-spacing: .05pt;"> </span>is<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ax<span style="letter-spacing: .1pt;">i</span><span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">i</span>ze shareh<span style="letter-spacing: -.05pt;">o</span><span style="letter-spacing: .05pt;">l</span>de<span style="letter-spacing: -.05pt;">r</span>’s<span style="letter-spacing: .1pt;"> </span>r<span style="letter-spacing: -.05pt;">e</span>turn<span style="letter-spacing: .1pt;"> </span>so<span style="letter-spacing: .1pt;"> </span>th<span style="letter-spacing: -.05pt;">a</span>t<span style="letter-spacing: .1pt;"> </span>the<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.05pt;">v</span>alue<span style="letter-spacing: .1pt;"> </span>of his invest<span style="letter-spacing: -.1pt;">m</span>ent is <span style="letter-spacing: -.1pt;">m</span>ax<span style="letter-spacing: .1pt;">i</span><span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">i</span>zed. Shareholders’ r<span style="letter-spacing: -.05pt;">e</span>turn consists of t<span style="letter-spacing: -.05pt;">w</span>o<span style="letter-spacing: .05pt;"> </span>co<span style="letter-spacing: -.1pt;">m</span>ponents:<span style="letter-spacing: .05pt;"> </span>dividends and capital gains. Dividend policy has<span style="letter-spacing: -.1pt;"> </span>a direct i<span style="letter-spacing: -.1pt;">m</span>pact on these co<span style="letter-spacing: -.1pt;">m</span>ponents.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.75pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">A Low payout ratio <span style="letter-spacing: -.1pt;">m</span>ay produce higher sha<span style="letter-spacing: .05pt;">r</span>e<span style="letter-spacing: .05pt;"> </span>price<span style="letter-spacing: .05pt;"> </span>because<span style="letter-spacing: .05pt;"> </span>it<span style="letter-spacing: .05pt;"> </span>accelerates earnings growth. Investors of growth co<span style="letter-spacing: -.1pt;">m</span>panies<span style="letter-spacing: .1pt;"> </span>will<span style="letter-spacing: .1pt;"> </span>r<span style="letter-spacing: -.05pt;">e</span>alize<span style="letter-spacing: .1pt;"> </span>t<span style="letter-spacing: -.05pt;">h</span>eir<span style="letter-spacing: .1pt;"> </span>r<span style="letter-spacing: -.05pt;">e</span>turn<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ostly<span style="letter-spacing: .1pt;"> </span>in<span style="letter-spacing: .1pt;"> </span>t<span style="letter-spacing: -.05pt;">h</span>e<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.05pt;">f</span>orm of capital<span style="letter-spacing: .05pt;"> </span>gains.<span style="letter-spacing: .05pt;"> </span>Dividend<span style="letter-spacing: .05pt;"> </span>yield-<span style="letter-spacing: .05pt;"> </span>dividend<span style="letter-spacing: .05pt;"> </span>per share<span style="letter-spacing: .1pt;"> </span>divided<span style="letter-spacing: .1pt;"> </span>by<span style="letter-spacing: .1pt;"> </span>the<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: -.05pt;">a</span>rket<span style="letter-spacing: .1pt;"> </span>price<span style="letter-spacing: .1pt;"> </span>per<span style="letter-spacing: .1pt;"> </span>share- will be low <span style="letter-spacing: -.05pt;">f</span>or such co<span style="letter-spacing: -.1pt;">m</span>panies. The i<span style="letter-spacing: -.1pt;">m</span>pact of dividend<span style="letter-spacing: .05pt;"> </span>policy<span style="letter-spacing: .05pt;"> </span>on<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">f</span>uture<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">c</span>apital<span style="letter-spacing: .05pt;"> </span>g<span style="letter-spacing: -.05pt;">a</span>ins<span style="letter-spacing: .05pt;"> </span>is, however,<span style="letter-spacing: 1.85pt;"> </span>co<span style="letter-spacing: -.1pt;">m</span>plex.<span style="letter-spacing: 1.85pt;"> </span>Capital<span style="letter-spacing: 1.85pt;"> </span>gains<span style="letter-spacing: 1.85pt;"> </span>occur<span style="letter-spacing: 1.85pt;"> </span>in<span style="letter-spacing: 1.85pt;"> </span>dis<span style="letter-spacing: -.1pt;">t</span>ant<span style="letter-spacing: 1.85pt;"> </span>future,<span style="letter-spacing: 1.85pt;"> </span>and<span style="letter-spacing: 1.85pt;"> </span>therefore,<span style="letter-spacing: 1.85pt;"> </span>are<span style="letter-spacing: 1.85pt;"> </span>considered uncertain. It is not certain t<span style="letter-spacing: -.2pt;">h</span>at<span style="letter-spacing: .05pt;"> </span>low<span style="letter-spacing: .05pt;"> </span>payo<span style="letter-spacing: -.05pt;">u</span>t<span style="letter-spacing: .05pt;"> </span>r<span style="letter-spacing: -.05pt;">a</span>tio<span style="letter-spacing: .05pt;"> </span>p<span style="letter-spacing: -.05pt;">o</span>licy<span style="letter-spacing: .05pt;"> </span>will<span style="letter-spacing: .05pt;"> </span>n<span style="letter-spacing: -.05pt;">e</span>cess<span style="letter-spacing: -.05pt;">a</span>ry<span style="letter-spacing: .05pt;"> </span>lead<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">h</span><span style="letter-spacing: .05pt;">i</span>gher<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">p</span>rices in reality. It is quite difficult to clearly identify the effect of payout on share price.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.95pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">A high payout ratio <span style="letter-spacing: -.1pt;">m</span>eans <span style="letter-spacing: -.1pt;">m</span>ore current dividends and less retained earnings,<span style="letter-spacing: .05pt;"> </span>which<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ay consequently result in slower growth <span style="letter-spacing: -.05pt;">a</span>nd <span style="letter-spacing: -.05pt;">p</span>erhaps lower <span style="letter-spacing: -.1pt;">m</span>arket price per share.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.8pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">Paying dividends involve outflow of cash. T<span style="letter-spacing: -.05pt;">h</span>e<span style="letter-spacing: .05pt;"> </span>cash<span style="letter-spacing: .05pt;"> </span>availa<span style="letter-spacing: -.05pt;">b</span>ility<span style="letter-spacing: .05pt;"> </span>for<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">p</span>ay<span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: .05pt;"> </span>of dividends is affected by fir<span style="letter-spacing: -.1pt;">m</span>’s invest<span style="letter-spacing: -.1pt;">m</span>ent and<span style="letter-spacing: .05pt;"> </span>financing<span style="letter-spacing: .05pt;"> </span>decisions.<span style="letter-spacing: .05pt;"> </span>Thus,<span style="letter-spacing: .05pt;"> </span>invest<span style="letter-spacing: -.1pt;">m</span>ent decisions affect dividend decisions.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 51.95pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-size: 10.0pt;">There are three main factors that m<span style="letter-spacing: -.05pt;">a</span>y i<span style="letter-spacing: -.1pt;">n</span>flue<span style="letter-spacing: -.05pt;">n</span>ce a firm's di<span style="letter-spacing: -.05pt;">v</span><span style="letter-spacing: .05pt;">i</span>dend decisio<span style="letter-spacing: -.05pt;">n</span>:</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 346.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Free-cash flow<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 325.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Dividend clienteles<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 313.75pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 23.0pt; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt; mso-font-width: 131%;">•</span><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span>Infor<span style="letter-spacing: -.1pt;">m</span>ation signaling<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 240.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-size: 10.0pt;">The free cash flow<span style="letter-spacing: -.1pt;"> </span>theory of dividends</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">Under this theory, the dividend decision is very<span style="letter-spacing: .05pt;"> </span>si<span style="letter-spacing: -.1pt;">m</span>ple.<span style="letter-spacing: .05pt;"> </span>The<span style="letter-spacing: .05pt;"> </span>firm<span style="letter-spacing: .05pt;"> </span>s<span style="letter-spacing: .1pt;">i</span><span style="letter-spacing: -.1pt;">m</span>ply<span style="letter-spacing: .05pt;"> </span>pays<span style="letter-spacing: .05pt;"> </span>out,<span style="letter-spacing: .05pt;"> </span>as dividends,<span style="letter-spacing: 1.9pt;"> </span>any<span style="letter-spacing: 1.9pt;"> </span>cash<span style="letter-spacing: 1.9pt;"> </span>that<span style="letter-spacing: 1.9pt;"> </span>is<span style="letter-spacing: 1.9pt;"> </span>sur<span style="letter-spacing: -.05pt;">p</span>lus<span style="letter-spacing: 1.9pt;"> </span>a<span style="letter-spacing: -.05pt;">f</span>t<span style="letter-spacing: -.05pt;">e</span>r<span style="letter-spacing: 1.9pt;"> </span>it<span style="letter-spacing: 1.9pt;"> </span>inv<span style="letter-spacing: -.05pt;">e</span>sts<span style="letter-spacing: 1.9pt;"> </span>in<span style="letter-spacing: 1.9pt;"> </span>all<span style="letter-spacing: 1.9pt;"> </span>availa<span style="letter-spacing: -.05pt;">b</span><span style="letter-spacing: .05pt;">l</span>e<span style="letter-spacing: 2.0pt;"> </span>positi<span style="letter-spacing: -.05pt;">v</span>e<span style="letter-spacing: 2.0pt;"> </span>net<span style="letter-spacing: 2.0pt;"> </span><span style="letter-spacing: -.05pt;">p</span>rese<span style="letter-spacing: -.05pt;">n</span>t value pr<span style="letter-spacing: -.05pt;">o</span><span style="letter-spacing: .05pt;">j</span>ects.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">A key criticism of this theory is that it does not explain the observed dividend policies of real-world companies. Most companies pay relatively consistent dividends from one year to the next and managers tend to prefer to pay a steadily increasing dividend rather than paying a dividend that fluctuates dramatically from one year to the next. These criticisms have led to the development of other models that seek to explain the dividend decision<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 339.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-size: 10.0pt;">Dividend clienteles</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.8pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">A particular pattern of dividend pay<span style="letter-spacing: -.1pt;">m</span>ents <span style="letter-spacing: -.1pt;">m</span>ay<span style="letter-spacing: .05pt;"> </span>suit<span style="letter-spacing: .05pt;"> </span>one<span style="letter-spacing: .05pt;"> </span>type<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>stockholder<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ore<span style="letter-spacing: .05pt;"> </span>than another.<span style="letter-spacing: .05pt;"> </span>A<span style="letter-spacing: .05pt;"> </span>retiree<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ay<span style="letter-spacing: .05pt;"> </span>prefer<span style="letter-spacing: .05pt;"> </span>to invest<span style="letter-spacing: .05pt;"> </span>in<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>firm<span style="letter-spacing: -.05pt;"> </span>that<span style="letter-spacing: .05pt;"> </span>provi<span style="letter-spacing: -.15pt;">d</span>es<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>consistently<span style="letter-spacing: .05pt;"> </span>high<span style="letter-spacing: .05pt;"> </span>dividend yield,<span style="letter-spacing: .05pt;"> </span>whereas<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>person<span style="letter-spacing: .05pt;"> </span>with<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>high<span style="letter-spacing: .05pt;"> </span>inco<span style="letter-spacing: -.1pt;">m</span>e<span style="letter-spacing: .1pt;"> </span>from e<span style="letter-spacing: -.1pt;">m</span>p<span style="letter-spacing: .1pt;">l</span>oy<span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: .1pt;"> </span>may<span style="letter-spacing: .1pt;"> </span>prefer<span style="letter-spacing: .1pt;"> </span>to<span style="letter-spacing: .1pt;"> </span>avoid dividends<span style="letter-spacing: .85pt;"> </span>due<span style="letter-spacing: .85pt;"> </span>to<span style="letter-spacing: .85pt;"> </span>their<span style="letter-spacing: .85pt;"> </span>high<span style="letter-spacing: .85pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ar<span style="letter-spacing: -.05pt;">g</span>inal<span style="letter-spacing: .85pt;"> </span>tax<span style="letter-spacing: .85pt;"> </span>r<span style="letter-spacing: -.05pt;">a</span>te<span style="letter-spacing: .85pt;"> </span>on<span style="letter-spacing: .85pt;"> </span>inco<span style="letter-spacing: -.1pt;">m</span>e.<span style="letter-spacing: .85pt;"> </span>If<span style="letter-spacing: .8pt;"> </span>client<span style="letter-spacing: -.05pt;">e</span><span style="letter-spacing: .05pt;">l</span>es<span style="letter-spacing: .85pt;"> </span>e<span style="letter-spacing: -.05pt;">x</span>ist<span style="letter-spacing: .85pt;"> </span><span style="letter-spacing: -.05pt;">f</span>or<span style="letter-spacing: .85pt;"> </span>p<span style="letter-spacing: -.05pt;">a</span>rticular<o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: always;" /> </span> <div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">patterns<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>dividend<span style="letter-spacing: .05pt;"> </span>pay<span style="letter-spacing: -.1pt;">m</span>ents,<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>firm may<span style="letter-spacing: .05pt;"> </span>be<span style="letter-spacing: .1pt;"> </span>able<span style="letter-spacing: .1pt;"> </span>to<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ax<span style="letter-spacing: .1pt;">i</span><span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">i</span>ze<span style="letter-spacing: .1pt;"> </span>its<span style="letter-spacing: .1pt;"> </span>st<span style="letter-spacing: -.05pt;">o</span>ck<span style="letter-spacing: .1pt;"> </span>price<span style="letter-spacing: .1pt;"> </span>and <span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">i</span>ni<span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">i</span>ze<span style="letter-spacing: .05pt;"> </span>its<span style="letter-spacing: .05pt;"> </span>co<span style="letter-spacing: -.05pt;">s</span>t<span style="letter-spacing: .05pt;"> </span>of capit<span style="letter-spacing: -.05pt;">a</span>l<span style="letter-spacing: .05pt;"> </span>by<span style="letter-spacing: .05pt;"> </span>c<span style="letter-spacing: -.05pt;">a</span>t<span style="letter-spacing: -.05pt;">e</span>ring<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>particular<span style="letter-spacing: .1pt;"> </span>clientele.<span style="letter-spacing: .1pt;"> </span>This<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.1pt;">m</span>odel<span style="letter-spacing: .1pt;"> </span>may<span style="letter-spacing: .1pt;"> </span>help<span style="letter-spacing: .1pt;"> </span>to explain the relatively consistent dividend<span style="letter-spacing: -.1pt;"> </span>p<span style="letter-spacing: -.05pt;">o</span>li<span style="letter-spacing: -.05pt;">c</span>ies <span style="letter-spacing: -.05pt;">f</span>ollowed by <span style="letter-spacing: -.1pt;">m</span>ost li<span style="letter-spacing: -.05pt;">s</span>ted co<span style="letter-spacing: -.1pt;">m</span>panies.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">A<span style="letter-spacing: 1.65pt;"> </span>key<span style="letter-spacing: 1.65pt;"> </span>criticism<span style="letter-spacing: 1.55pt;"> </span>of<span style="letter-spacing: 1.6pt;"> </span>the<span style="letter-spacing: 1.65pt;"> </span>idea<span style="letter-spacing: 1.65pt;"> </span>of<span style="letter-spacing: 1.65pt;"> </span>dividend<span style="letter-spacing: 1.65pt;"> </span>clienteles<span style="letter-spacing: 1.65pt;"> </span>is<span style="letter-spacing: 1.65pt;"> </span>that<span style="letter-spacing: 1.6pt;"> </span>investors<span style="letter-spacing: 1.7pt;"> </span>do<span style="letter-spacing: 1.7pt;"> </span>not<span style="letter-spacing: 1.7pt;"> </span>need<span style="letter-spacing: 1.7pt;"> </span>to<span style="letter-spacing: 1.7pt;"> </span>rely upon<span style="letter-spacing: 2.1pt;"> </span>the<span style="letter-spacing: 2.1pt;"> </span>firm<span style="letter-spacing: 2.0pt;"> </span>to<span style="letter-spacing: 2.1pt;"> </span>provide<span style="letter-spacing: 2.1pt;"> </span>the<span style="letter-spacing: 2.1pt;"> </span>pattern<span style="letter-spacing: 2.1pt;"> </span>of<span style="letter-spacing: 2.1pt;"> </span>cash<span style="letter-spacing: 2.05pt;"> </span>flows<span style="letter-spacing: 2.1pt;"> </span>that<span style="letter-spacing: 2.1pt;"> </span>they<span style="letter-spacing: 2.1pt;"> </span>desire.<span style="letter-spacing: 2.1pt;"> </span>An<span style="letter-spacing: 2.1pt;"> </span>investor<span style="letter-spacing: 2.1pt;"> </span>who would<span style="letter-spacing: .1pt;"> </span>like<span style="letter-spacing: .1pt;"> </span>to<span style="letter-spacing: .1pt;"> </span>re<span style="letter-spacing: -.05pt;">c</span>eive<span style="letter-spacing: .1pt;"> </span>so<span style="letter-spacing: -.1pt;">m</span>e<span style="letter-spacing: .1pt;"> </span>cash<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.05pt;">f</span>rom their<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.05pt;">i</span>nvest<span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: .1pt;"> </span>always<span style="letter-spacing: .1pt;"> </span>has<span style="letter-spacing: .1pt;"> </span>t<span style="letter-spacing: -.05pt;">h</span>e<span style="letter-spacing: .15pt;"> </span>option<span style="letter-spacing: .15pt;"> </span>of<span style="letter-spacing: .15pt;"> </span>selling<span style="letter-spacing: .15pt;"> </span>a portion of their holding. This argu<span style="letter-spacing: -.1pt;">m</span>ent is e<span style="letter-spacing: -.05pt;">v</span>en <span style="letter-spacing: -.1pt;">m</span>ore cogent in recent ti<span style="letter-spacing: -.1pt;">m</span>es, with the advent<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>very<span style="letter-spacing: .05pt;"> </span>low-cost<span style="letter-spacing: .05pt;"> </span>discount<span style="letter-spacing: .05pt;"> </span>stockbrokers.<span style="letter-spacing: .1pt;"> </span>It re<span style="letter-spacing: -.1pt;">m</span>ains<span style="letter-spacing: .1pt;"> </span>possi<span style="letter-spacing: -.05pt;">b</span><span style="letter-spacing: .05pt;">l</span>e<span style="letter-spacing: .1pt;"> </span>that<span style="letter-spacing: .05pt;"> </span>there<span style="letter-spacing: .05pt;"> </span>are<span style="letter-spacing: .05pt;"> </span>taxation- based clienteles for certain<span style="letter-spacing: -.05pt;"> </span>types of dividend policies.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 324.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><span style="font-size: 10.0pt;">Information signaling</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">A<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">m</span>odel<span style="letter-spacing: .05pt;"> </span>developed<span style="letter-spacing: .05pt;"> </span>by<span style="letter-spacing: .05pt;"> </span>Merton<span style="letter-spacing: .1pt;"> </span>Miller<span style="letter-spacing: .1pt;"> </span>and<span style="letter-spacing: .1pt;"> </span>Kevin<span style="letter-spacing: .1pt;"> </span>Rock<span style="letter-spacing: .1pt;"> </span>in 1985<span style="letter-spacing: .05pt;"> </span>suggests<span style="letter-spacing: .05pt;"> </span>that<span style="letter-spacing: .05pt;"> </span>dividend announce<span style="letter-spacing: -.1pt;">m</span>ents<span style="letter-spacing: .05pt;"> </span>convey<span style="letter-spacing: .05pt;"> </span>infor<span style="letter-spacing: -.1pt;">m</span>ation<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span>investo<span style="letter-spacing: -.1pt;">r</span>s<span style="letter-spacing: .1pt;"> </span>regarding the<span style="letter-spacing: .1pt;"> </span>fir<span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: -.05pt;">'</span>s<span style="letter-spacing: .1pt;"> </span>future<span style="letter-spacing: .1pt;"> </span>prospects. Many<span style="letter-spacing: .05pt;"> </span>earlier<span style="letter-spacing: .05pt;"> </span>studies<span style="letter-spacing: .05pt;"> </span>had<span style="letter-spacing: .05pt;"> </span>shown<span style="letter-spacing: .05pt;"> </span>that<span style="letter-spacing: .05pt;"> </span>stock<span style="letter-spacing: .05pt;"> </span>pri<span style="letter-spacing: -.05pt;">c</span>es<span style="letter-spacing: .1pt;"> </span>tend to<span style="letter-spacing: .1pt;"> </span>increase<span style="letter-spacing: .1pt;"> </span>when<span style="letter-spacing: .1pt;"> </span>an<span style="letter-spacing: .1pt;"> </span>in<span style="letter-spacing: -.05pt;">c</span>rease<span style="letter-spacing: .1pt;"> </span>in dividends is announced and tend to decrease<span style="letter-spacing: .05pt;"> </span>when<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>decrease<span style="letter-spacing: .05pt;"> </span>or<span style="letter-spacing: .05pt;"> </span>o<span style="letter-spacing: -.1pt;">m</span>ission<span style="letter-spacing: .05pt;"> </span>is<span style="letter-spacing: .05pt;"> </span>announced. Miller <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>and <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>Rock <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>p<span style="letter-spacing: -.05pt;">o</span>inted <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>o<span style="letter-spacing: -.05pt;">u</span>t <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>th<span style="letter-spacing: -.05pt;">a</span>t <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>t<span style="letter-spacing: -.05pt;">h</span>is <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>is<span style="mso-spacerun: yes;"> </span>li<span style="letter-spacing: -.05pt;">k</span>ely <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>due <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>to <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>in<span style="letter-spacing: -.05pt;">f</span>or<span style="letter-spacing: -.1pt;">m</span>ation <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>conte<span style="letter-spacing: -.05pt;">n</span>t <span style="letter-spacing: .05pt;"><span style="mso-spacerun: yes;"> </span></span>of dividends.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">When<span style="letter-spacing: .1pt;"> </span>investors<span style="letter-spacing: .1pt;"> </span>have<span style="letter-spacing: .1pt;"> </span>inco<span style="letter-spacing: -.1pt;">m</span>plete<span style="letter-spacing: .1pt;"> </span>infor<span style="letter-spacing: -.1pt;">m</span>at<span style="letter-spacing: -.05pt;">i</span>on<span style="letter-spacing: .1pt;"> </span>about<span style="letter-spacing: .1pt;"> </span>the<span style="letter-spacing: .1pt;"> </span>firm (perhaps<span style="letter-spacing: .1pt;"> </span>due<span style="letter-spacing: .1pt;"> </span>to<span style="letter-spacing: .1pt;"> </span>opaque accounting<span style="letter-spacing: 1.0pt;"> </span>practices)<span style="letter-spacing: 1.0pt;"> </span>they<span style="letter-spacing: 1.0pt;"> </span>will<span style="letter-spacing: 1.0pt;"> </span>look<span style="letter-spacing: 1.0pt;"> </span>for<span style="letter-spacing: 1.0pt;"> </span>other<span style="letter-spacing: 1.0pt;"> </span>i<span style="letter-spacing: -.1pt;">n</span>for<span style="letter-spacing: -.1pt;">m</span>ation<span style="letter-spacing: 1.1pt;"> </span>that<span style="letter-spacing: 1.1pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ay<span style="letter-spacing: 1.1pt;"> </span>provide<span style="letter-spacing: 1.1pt;"> </span>a<span style="letter-spacing: 1.1pt;"> </span>clue<span style="letter-spacing: 1.1pt;"> </span>as<span style="letter-spacing: 1.1pt;"> </span>to the<span style="letter-spacing: 2.1pt;"> </span>firm<span style="letter-spacing: -.05pt;">'</span>s<span style="letter-spacing: 2.1pt;"> </span>future<span style="letter-spacing: 2.1pt;"> </span>prospects.<span style="letter-spacing: 2.1pt;"> </span>Managers<span style="letter-spacing: 2.1pt;"> </span>have<span style="letter-spacing: 2.15pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ore<span style="letter-spacing: 2.1pt;"> </span>info<span style="letter-spacing: .1pt;">r</span><span style="letter-spacing: -.1pt;">m</span>ation<span style="letter-spacing: 2.1pt;"> </span>than<span style="letter-spacing: 2.1pt;"> </span>investors<span style="letter-spacing: 2.1pt;"> </span>about<span style="letter-spacing: 2.1pt;"> </span>the fir<span style="letter-spacing: -.1pt;">m</span>, and such info<span style="letter-spacing: .1pt;">r</span><span style="letter-spacing: -.1pt;">m</span>ation <span style="letter-spacing: -.1pt;">m</span>ay inform t<span style="letter-spacing: -.05pt;">h</span>eir dividend decisions. <span style="letter-spacing: -.1pt;">W</span>hen <span style="letter-spacing: -.1pt;">m</span>anagers lack con<span style="letter-spacing: -.05pt;">f</span>idence in the <span style="letter-spacing: -.05pt;">f</span><span style="letter-spacing: .05pt;">i</span>r<span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: -.05pt;">'</span>s ability to gen<span style="letter-spacing: -.05pt;">e</span>r<span style="letter-spacing: -.05pt;">a</span>te c<span style="letter-spacing: -.05pt;">a</span>sh<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">f</span><span style="letter-spacing: .05pt;">l</span>ows<span style="letter-spacing: .05pt;"> </span>in<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">f</span>ut<span style="letter-spacing: -.05pt;">u</span>re<span style="letter-spacing: .05pt;"> </span>they<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ay<span style="letter-spacing: .05pt;"> </span>keep dividends<span style="mso-spacerun: yes;"> </span>constant,<span style="mso-spacerun: yes;"> </span>or<span style="mso-spacerun: yes;"> </span>possibly<span style="mso-spacerun: yes;"> </span>even<span style="mso-spacerun: yes;"> </span>r<span style="letter-spacing: -.05pt;">e</span>duce <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>the <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>a<span style="letter-spacing: -.1pt;">m</span>ount <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>of <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>dividends <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>paid <span style="letter-spacing: .1pt;"><span style="mso-spacerun: yes;"> </span></span>out. Conversely, <span style="letter-spacing: -.1pt;">m</span>anagers that have access to i<span style="letter-spacing: -.05pt;">n</span>for<span style="letter-spacing: -.1pt;">m</span>ation<span style="letter-spacing: .05pt;"> </span>that<span style="letter-spacing: .05pt;"> </span>in<span style="letter-spacing: -.05pt;">d</span><span style="letter-spacing: .05pt;">i</span>cates<span style="letter-spacing: .05pt;"> </span>very<span style="letter-spacing: .05pt;"> </span>good<span style="letter-spacing: .05pt;"> </span>future prospects for the firm<span style="letter-spacing: -.1pt;"> </span>(eg. a full order book)<span style="letter-spacing: -.1pt;"> </span>are <span style="letter-spacing: -.1pt;">m</span>ore likely to increase<span style="letter-spacing: -.05pt;"> </span>dividends.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 3.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">Investors<span style="letter-spacing: .05pt;"> </span>can<span style="letter-spacing: .05pt;"> </span>use<span style="letter-spacing: .05pt;"> </span>this<span style="letter-spacing: .05pt;"> </span>knowledge<span style="letter-spacing: .05pt;"> </span>about<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">m</span>anag<span style="letter-spacing: -.05pt;">e</span>rs' behaviour<span style="letter-spacing: .1pt;"> </span>to<span style="letter-spacing: .1pt;"> </span>inform their<span style="letter-spacing: .1pt;"> </span>decision<span style="letter-spacing: .1pt;"> </span>to buy<span style="letter-spacing: 2.6pt;"> </span>or<span style="letter-spacing: 2.6pt;"> </span>sell<span style="letter-spacing: 2.6pt;"> </span>the<span style="letter-spacing: 2.6pt;"> </span>firm<span style="letter-spacing: -.05pt;">'</span>s<span style="letter-spacing: 2.6pt;"> </span>stock,<span style="letter-spacing: 2.6pt;"> </span>bidding<span style="letter-spacing: 2.6pt;"> </span>the<span style="letter-spacing: 2.6pt;"> </span>p<span style="letter-spacing: .05pt;">r</span>ice<span style="letter-spacing: 2.6pt;"> </span>up<span style="letter-spacing: 2.6pt;"> </span>in<span style="letter-spacing: 2.6pt;"> </span>the<span style="letter-spacing: 2.6pt;"> </span>case<span style="letter-spacing: 2.6pt;"> </span>of<span style="letter-spacing: 2.6pt;"> </span>a<span style="letter-spacing: 2.6pt;"> </span>positive<span style="letter-spacing: 2.6pt;"> </span>dividend surprise,<span style="letter-spacing: .75pt;"> </span>or<span style="letter-spacing: .75pt;"> </span>selling<span style="letter-spacing: .75pt;"> </span>it<span style="letter-spacing: .75pt;"> </span>down<span style="letter-spacing: .75pt;"> </span>when<span style="letter-spacing: .8pt;"> </span>dividends<span style="letter-spacing: .8pt;"> </span>do<span style="letter-spacing: .8pt;"> </span>not<span style="letter-spacing: .8pt;"> </span><span style="letter-spacing: -.1pt;">m</span>eet<span style="letter-spacing: .8pt;"> </span>expectations.<span style="letter-spacing: .8pt;"> </span>This,<span style="letter-spacing: .8pt;"> </span>in<span style="letter-spacing: .8pt;"> </span>turn,<span style="letter-spacing: .8pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ay influence the dividend decision as <span style="letter-spacing: -.1pt;">m</span>anagers know that stock holders closely watch dividend announce<span style="letter-spacing: -.1pt;">m</span>ents looking for good or b<span style="letter-spacing: -.1pt;">a</span>d<span style="letter-spacing: .05pt;"> </span>news.<span style="letter-spacing: .05pt;"> </span>As<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">m</span>anagers<span style="letter-spacing: .05pt;"> </span>tend<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span>avoid sending<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>negative<span style="letter-spacing: .05pt;"> </span>signal<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span>the <span style="letter-spacing: -.1pt;">m</span>arket<span style="letter-spacing: .05pt;"> </span>about<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>future<span style="letter-spacing: .05pt;"> </span>prosp<span style="letter-spacing: -.1pt;">e</span>cts<span style="letter-spacing: .1pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>th<span style="letter-spacing: -.05pt;">e</span><span style="letter-spacing: .05pt;">i</span>r<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.05pt;">f</span><span style="letter-spacing: .05pt;">i</span>r<span style="letter-spacing: -.1pt;">m</span>,<span style="letter-spacing: .1pt;"> </span>this<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.05pt;">a</span><span style="letter-spacing: .05pt;">l</span>so tends to lead to a dividend policy of<span style="letter-spacing: .05pt;"> </span>a steady, gradually increasing pay<span style="letter-spacing: -.1pt;">m</span>ent.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 250.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><b><u style="text-underline: thick;"><span style="font-size: 10.0pt;">Example: Dividend Policy at ONGC</span></u></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">Dividends are declared at t<span style="letter-spacing: -.05pt;">h</span>e Annual General Meeting of t<span style="letter-spacing: -.1pt;">h</span>e shareholders based on the recom<span style="letter-spacing: -.1pt;">m</span>endation by the Board. The Board <span style="letter-spacing: -.1pt;">m</span>ay<span style="letter-spacing: .05pt;"> </span>recom<span style="letter-spacing: -.1pt;">m</span>end<span style="letter-spacing: .05pt;"> </span>dividends,<span style="letter-spacing: .05pt;"> </span>at<span style="letter-spacing: .05pt;"> </span>its<span style="letter-spacing: .05pt;"> </span>discretion,<span style="letter-spacing: .05pt;"> </span>to be<span style="letter-spacing: .1pt;"> </span>paid<span style="letter-spacing: .1pt;"> </span>to<span style="letter-spacing: .1pt;"> </span>our<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">e</span><span style="letter-spacing: -.1pt;">m</span>bers.<span style="letter-spacing: .1pt;"> </span>The<span style="letter-spacing: .1pt;"> </span>Board<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.1pt;">m</span>ay<span style="letter-spacing: .1pt;"> </span>a<span style="letter-spacing: -.05pt;">l</span>so<span style="letter-spacing: .1pt;"> </span>declare<span style="letter-spacing: .1pt;"> </span>interim dividends.<span style="letter-spacing: .1pt;"> </span>Generally,<span style="letter-spacing: .1pt;"> </span>the factors that <span style="letter-spacing: -.1pt;">m</span>ay be conside<span style="letter-spacing: -.05pt;">r</span>ed<span style="letter-spacing: .05pt;"> </span>by<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>Board<span style="letter-spacing: .05pt;"> </span>before<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.1pt;">m</span>aking<span style="letter-spacing: .05pt;"> </span>any<span style="letter-spacing: .05pt;"> </span>recom<span style="letter-spacing: -.1pt;">m</span>endations<span style="letter-spacing: .05pt;"> </span>for<span style="letter-spacing: .05pt;"> </span>the dividend include,<span style="letter-spacing: .1pt;"> </span>but<span style="letter-spacing: .1pt;"> </span>are<span style="letter-spacing: .1pt;"> </span>not<span style="letter-spacing: .1pt;"> </span>li<span style="letter-spacing: -.1pt;">m</span>ited<span style="letter-spacing: .1pt;"> </span>to,<span style="letter-spacing: .1pt;"> </span>future<span style="letter-spacing: .05pt;"> </span>capital<span style="letter-spacing: .1pt;"> </span>expenditure<span style="letter-spacing: .1pt;"> </span>plans,<span style="letter-spacing: .1pt;"> </span>profits<span style="letter-spacing: .1pt;"> </span>earned during<span style="letter-spacing: .1pt;"> </span>the<span style="letter-spacing: .1pt;"> </span>financial<span style="letter-spacing: .1pt;"> </span>year,<span style="letter-spacing: .1pt;"> </span>cost<span style="letter-spacing: .1pt;"> </span>of<span style="letter-spacing: .1pt;"> </span>raising<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.05pt;">f</span>unds<span style="letter-spacing: .1pt;"> </span>from alternate<span style="letter-spacing: .1pt;"> </span>sources,<span style="letter-spacing: .1pt;"> </span>cash<span style="letter-spacing: .1pt;"> </span>flow<span style="letter-spacing: .1pt;"> </span>position and applicable taxes including tax on dividend,<span style="letter-spacing: .05pt;"> </span>subject<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>Govern<span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: .05pt;"> </span>guidelines described below:<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; text-autospace: none;"><span style="font-size: 10.0pt;">As per the guideline dated February 11, 1998 from the Government of India, all profit- making PSUs which are essentially commercial enterprises should declare the higher of a minimum dividend of 20 percent on equity or a minimum dividend payout of 20 percent of post-tax profit. The minimum dividend pay-out in respect of enterprises in the oil, petroleum, chemical and other infrastructure sectors such as us should be 30 percent of post-tax profits<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com2tag:blogger.com,1999:blog-6717078704597438349.post-91863138285521399962011-06-18T05:39:00.000-07:002011-06-18T05:39:23.339-07:00Rank the projects according to each of the following methods : (i) Pay back (ii) ARR (iii) IRR and (iv) NPV- assuming discount rates of 10% and 30%<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="Section1"> <div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-size: 10.0pt;">Ravi Co Ltd. is considering the follo<span style="letter-spacing: -.1pt;">w</span><span style="letter-spacing: .05pt;">i</span>ng investment projects:</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 178.9pt; margin-right: 177.95pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><u><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">Cash flows (Rs.)</span></u><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 39.0pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 17.9pt; mso-yfti-irow: 0;"> <td style="height: 17.9pt; padding: 0in 0in 0in 0in; width: 57.35pt;" valign="top" width="76"> <div class="MsoNormal" style="margin-left: 2.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Projects<o:p></o:p></span></div></td> <td style="height: 17.9pt; padding: 0in 0in 0in 0in; width: 71.15pt;" valign="top" width="95"> <div class="MsoNormal" style="margin-left: 22.65pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Year0<o:p></o:p></span></div></td> <td style="height: 17.9pt; padding: 0in 0in 0in 0in; width: 73.4pt;" valign="top" width="98"> <div class="MsoNormal" style="margin-left: 17.55pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt; letter-spacing: -.05pt;">Y</span><span style="font-size: 10.0pt;">ear1<o:p></o:p></span></div></td> <td style="height: 17.9pt; padding: 0in 0in 0in 0in; width: 69.0pt;" valign="top" width="92"> <div class="MsoNormal" style="margin-left: 16.15pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt; letter-spacing: -.05pt;">Y</span><span style="font-size: 10.0pt;">ear2<o:p></o:p></span></div></td> <td style="height: 17.9pt; padding: 0in 0in 0in 0in; width: 60.85pt;" valign="top" width="81"> <div class="MsoNormal" style="margin-left: 19.15pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt; letter-spacing: -.05pt;">Y</span><span style="font-size: 10.0pt;">ear3<o:p></o:p></span></div></td> </tr>
<tr style="height: 13.8pt; mso-yfti-irow: 1;"> <td style="height: 13.8pt; padding: 0in 0in 0in 0in; width: 57.35pt;" valign="top" width="76"> <div class="MsoNormal" style="margin-left: 2.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">A<o:p></o:p></span></div></td> <td style="height: 13.8pt; padding: 0in 0in 0in 0in; width: 71.15pt;" valign="top" width="95"> <div class="MsoNormal" style="margin-left: 16.65pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">-10,000<o:p></o:p></span></div></td> <td style="height: 13.8pt; padding: 0in 0in 0in 0in; width: 73.4pt;" valign="top" width="98"> <div class="MsoNormal" style="margin-left: 17.5pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">+10,000<o:p></o:p></span></div></td> <td style="height: 13.8pt; padding: 0in 0in 0in 0in; width: 69.0pt;" valign="top" width="92"> <div class="MsoNormal" style="margin-left: 16.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">-<o:p></o:p></span></div></td> <td style="height: 13.8pt; padding: 0in 0in 0in 0in; width: 60.85pt;" valign="top" width="81"> <div class="MsoNormal" style="margin-left: 19.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">-<o:p></o:p></span></div></td> </tr>
<tr style="height: 13.8pt; mso-yfti-irow: 2;"> <td style="height: 13.8pt; padding: 0in 0in 0in 0in; width: 57.35pt;" valign="top" width="76"> <div class="MsoNormal" style="margin-left: 2.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">B<o:p></o:p></span></div></td> <td style="height: 13.8pt; padding: 0in 0in 0in 0in; width: 71.15pt;" valign="top" width="95"> <div class="MsoNormal" style="margin-left: 16.65pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">-10,000<o:p></o:p></span></div></td> <td style="height: 13.8pt; padding: 0in 0in 0in 0in; width: 73.4pt;" valign="top" width="98"> <div class="MsoNormal" style="margin-left: 17.5pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">+7,500<o:p></o:p></span></div></td> <td style="height: 13.8pt; padding: 0in 0in 0in 0in; width: 69.0pt;" valign="top" width="92"> <div class="MsoNormal" style="margin-left: 16.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">+7,500<o:p></o:p></span></div></td> <td style="height: 13.8pt; padding: 0in 0in 0in 0in; width: 60.85pt;" valign="top" width="81"> <div class="MsoNormal" style="margin-left: 19.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">-<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.7pt; mso-yfti-irow: 3; mso-yfti-lastrow: yes;"> <td style="height: 14.7pt; padding: 0in 0in 0in 0in; width: 57.35pt;" valign="top" width="76"> <div class="MsoNormal" style="margin-left: 2.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">C<o:p></o:p></span></div></td> <td style="height: 14.7pt; padding: 0in 0in 0in 0in; width: 71.15pt;" valign="top" width="95"> <div class="MsoNormal" style="margin-left: 16.65pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">-10,000<o:p></o:p></span></div></td> <td style="height: 14.7pt; padding: 0in 0in 0in 0in; width: 73.4pt;" valign="top" width="98"> <div class="MsoNormal" style="margin-left: 17.5pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">+2,000<o:p></o:p></span></div></td> <td style="height: 14.7pt; padding: 0in 0in 0in 0in; width: 69.0pt;" valign="top" width="92"> <div class="MsoNormal" style="margin-left: 16.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">+4,000<o:p></o:p></span></div></td> <td style="height: 14.7pt; padding: 0in 0in 0in 0in; width: 60.85pt;" valign="top" width="81"> <div class="MsoNormal" style="margin-left: 19.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">+12,000<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="margin-left: 41.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 112.0pt 185.0pt 256.0pt 334.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">D<span style="mso-tab-count: 1;"> </span>-10,000<span style="mso-tab-count: 1;"> </span>+10,000<span style="mso-tab-count: 1;"> </span>+3,000<span style="mso-tab-count: 1;"> </span>+3,000<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 42.5pt; margin-right: 94.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 115.0pt; text-autospace: none; text-indent: -.25in;"><span style="font-size: 10.0pt;">a) <span style="letter-spacing: 2.65pt;"><span style="mso-spacerun: yes;"> </span></span>Rank the projects acc<span style="letter-spacing: -.05pt;">o</span>rding to each of the following <span style="letter-spacing: -.1pt;">m</span>ethods : (i) Pay back<span style="mso-tab-count: 1;"> </span>(ii) ARR<span style="mso-spacerun: yes;"> </span>(iii) IRR and<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 42.5pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">(iv) NPV- assu<span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">i</span>ng dis<span style="letter-spacing: .05pt;">c</span>ount rates of 10% and 30%<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 24.5pt; margin-right: 33.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">b) <span style="letter-spacing: 2.0pt;"><span style="mso-spacerun: yes;"> </span></span>Assu<span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">i</span>ng that t<span style="letter-spacing: -.05pt;">h</span>e projects are indepen<span style="letter-spacing: -.05pt;">d</span>ent, which one should be acce<span style="letter-spacing: -.05pt;">p</span>te<span style="letter-spacing: -.05pt;">d</span>? If the projects are <span style="letter-spacing: -.1pt;">m</span>utually exclu<span style="letter-spacing: -.1pt;">s</span>ive, which <span style="letter-spacing: -.05pt;">p</span>roje<span style="letter-spacing: -.05pt;">c</span>t is the <span style="letter-spacing: -.05pt;">b</span>est?<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 159.0pt; text-autospace: none;"><b><span style="font-size: 10.0pt;">(a)<span style="letter-spacing: 1.0pt;"> </span>(I) Pay Bank Period =<span style="mso-tab-count: 1;"> </span>Initial cash o<span style="letter-spacing: -.05pt;">u</span>t flow</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 140.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-size: 10.0pt;">Annual cash Inflow<span style="letter-spacing: -.1pt;"> </span>after tax</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Project A = <u>10000</u> = 1 Year<o:p></o:p></span></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 60.1pt; margin-right: 347.1pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><span style="font-size: 10.0pt;">10000<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Project B = <u>10000</u> = 1.33 Years<o:p></o:p></span></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 63.1pt; margin-right: 350.1pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">7000</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Project C<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 77.0pt 149.0pt; text-autospace: none;"><b><span style="font-size: 10.0pt;">Year<span style="mso-tab-count: 1;"> </span>C.I.<span style="mso-tab-count: 1;"> </span>Cumulative C.I.</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 77.0pt 149.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">1<span style="mso-tab-count: 1;"> </span>2000<span style="mso-tab-count: 1;"> </span>2000<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 77.0pt 149.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">2<span style="mso-tab-count: 1;"> </span>4000<span style="mso-tab-count: 1;"> </span>6000<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 77.0pt 149.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">3<span style="mso-tab-count: 1;"> </span>12000<span style="mso-tab-count: 1;"> </span>22000<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">2 Years <span style="letter-spacing: .05pt;">+</span><u><span style="letter-spacing: -.05pt;"> </span>(10000-6000) </u>= 2.33 Years<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 68.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">12000</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Project D<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 77.0pt 149.0pt; text-autospace: none;"><b><span style="font-size: 10.0pt;">Year<span style="mso-tab-count: 1;"> </span>C.I.<span style="mso-tab-count: 1;"> </span>Cumulative C.I.</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 77.0pt 149.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">1<span style="mso-tab-count: 1;"> </span>10000<span style="mso-tab-count: 1;"> </span>10000<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 77.0pt 149.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">2<span style="mso-tab-count: 1;"> </span>3000<span style="mso-tab-count: 1;"> </span>13000<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 77.0pt 149.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">3<span style="mso-tab-count: 1;"> </span>3000<span style="mso-tab-count: 1;"> </span>16000<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">1 year<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">(a)<span style="letter-spacing: 1.65pt;"> </span>(ii) Accounting Rate of Return (APR) = Average Inco<span style="letter-spacing: -.1pt;">m</span>e/Average Invest<span style="letter-spacing: -.1pt;">m</span>ent<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Project A = (<u>10000-10000</u>)/<u>10000 </u>= 0<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 92.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 152.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">1<span style="mso-tab-count: 1;"> </span>2<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Project B = (75<u>00+7500-10000</u>)/<u>10000 </u>= .5 or .50%<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-left: 92.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 173.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">2<span style="mso-tab-count: 1;"> </span>2<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Project C =<span style="mso-spacerun: yes;"> </span>(20<u>00+4000+12000-10000</u>)/<u>10000 </u>= .533 or 53.33%<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 92.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 152.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">3<span style="mso-tab-count: 1;"> </span>2<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Project D = (<u>10000+3000+3000-10000</u>)/<u>10000<span style="letter-spacing: 2.9pt;"> </span></u>= .4 or .40%<o:p></o:p></span></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 114.1pt; margin-right: 247.1pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 207.0pt; text-align: center; text-autospace: none;"><span style="font-size: 10.0pt;">3<span style="mso-tab-count: 1;"> </span>2<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:rect id="_x0000_s1028" style='position:absolute;
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o:allowincell="f" filled="f" stroked="f"> <v:textbox style='mso-next-textbox:#_x0000_s1028' inset="0,0,0,0"/> </v:rect><![endif]--><!--[if !vml]--><span style="height: 242px; margin-left: 470px; margin-top: 221px; mso-ignore: vglayout; position: absolute; width: 255px; z-index: -126;"> </span></div><table cellpadding="0" cellspacing="0"><tbody>
<tr> <td height="242" style="vertical-align: top;" width="255"><!--[endif]--><!--[if !mso]--><span style="mso-ignore: vglayout; position: absolute; z-index: -126;"> <table cellpadding="0" cellspacing="0"><tbody>
<tr> <td><!--[endif]--> <div class="shape" style="padding: 0pt 0pt 0pt 0pt;" v:shape="_x0000_s1028"> <div class="MsoNormal" style="line-height: 178.0pt;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></div><!--[if !mso]--></td> </tr>
</tbody></table></span><!--[endif]--><!--[if !mso & !vml]--> <!--[endif]--><!--[if !vml]--></td> </tr>
</tbody></table><!--[endif]--><span style="font-size: 10.0pt;"><o:p></o:p></span><br />
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 30.65pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Net Cash Proceed includes recovery of inve<span style="letter-spacing: -.05pt;">s</span>t<span style="letter-spacing: -.1pt;">m</span>ents also. Therefore net cash earnin<span style="letter-spacing: -.05pt;">g</span>s are found by deducting initial invest<span style="letter-spacing: -.1pt;">m</span>ent.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">(a)<span style="letter-spacing: 1.65pt;"> </span>(iii) Int<span style="letter-spacing: -.05pt;">e</span>rnal R<span style="letter-spacing: -.05pt;">a</span>te of Return (IRR)<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 36.95pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">It is the rate of<span style="letter-spacing: -.05pt;"> </span>r<span style="letter-spacing: -.05pt;">e</span>turn at which P<span style="letter-spacing: -.05pt;">r</span>esent Value of cash Inflow is equal to present value of cash outflow.<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 95.0pt; margin-right: 50.15pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 284.0pt; text-autospace: none; text-indent: -1.25in;"><!--[if gte vml 1]><v:shape
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</tbody></table><!--[endif]--><span style="font-size: 10.0pt;">IRR = Low Rate + NPV at low Rate<span style="mso-tab-count: 1;"> </span>X (High Rate – Low Rate) NPV at low Rate – NPV at high Rate<o:p></o:p></span><br />
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-size: 10.0pt;">Project A</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
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o:allowincell="f" path="m,hhl,1420e" filled="f" strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 96px; left: 0px; margin-left: 211px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 2px; z-index: -121;"><img height="96" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image003.gif" v:shapes="_x0000_s1033" width="2" /></span><!--[endif]--><!--[if gte vml 1]><v:shape id="_x0000_s1032"
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o:allowincell="f" path="m,hhl,1420e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 96px; left: 0px; margin-left: 105px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 2px; z-index: -122;"><img height="96" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image002.gif" v:shapes="_x0000_s1032" width="2" /></span><!--[endif]--><!--[if gte vml 1]><v:shape id="_x0000_s1031"
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o:allowincell="f" path="m,hhl,1420e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 96px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 2px; z-index: -123;"><img height="96" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image003.gif" v:shapes="_x0000_s1031" width="2" /></span><!--[endif]--><!--[if gte vml 1]><v:shape id="_x0000_s1030"
style='position:absolute;left:0;text-align:left;margin-left:-.65pt;
margin-top:.3pt;width:479.25pt;height:0;z-index:-124' coordsize="9585,0"
o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="mso-ignore: vglayout; position: relative; z-index: -124;"><span style="height: 2px; left: -2px; left: 0px; position: absolute; top: -1px; width: 641px;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image006.gif" v:shapes="_x0000_s1030" width="641" /></span></span><!--[endif]--><span style="font-size: 10.0pt;">Year<span style="mso-tab-count: 1;"> </span><a href="mailto:@10%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF</span></a> @10%<span style="mso-tab-count: 1;"> </span><a href="mailto:PVF@12%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF@12%<span style="mso-tab-count: 1;"> </span></span></a>C.I.<span style="mso-tab-count: 1;"> </span>PV @ 10%<span style="mso-tab-count: 1;"> </span>PV @ 12%<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1038" style='position:absolute;left:0;text-align:left;
margin-left:-.65pt;margin-top:.4pt;width:479.25pt;height:0;z-index:-116'
coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e" filled="f"
strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -116;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image007.gif" v:shapes="_x0000_s1038" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">1<span style="mso-tab-count: 1;"> </span>.909<span style="mso-tab-count: 1;"> </span>.893<span style="mso-tab-count: 1;"> </span>10000<span style="mso-tab-count: 1;"> </span>9090<span style="mso-tab-count: 1;"> </span>8930</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section2"> <div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: -2.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1039"
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o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -115;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1039" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">Less: PV of outflow<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; tab-stops: 79.0pt; text-autospace: none;"><!--[if gte vml 1]><v:rect id="_x0000_s1027" style='position:absolute;
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<tr> <td height="239" style="vertical-align: top;" width="246"><!--[endif]--><!--[if !mso]--><span style="mso-ignore: vglayout; position: absolute; z-index: -127;"> <table cellpadding="0" cellspacing="0"><tbody>
<tr> <td><!--[endif]--> <div class="shape" style="padding: 0pt 0pt 0pt 0pt;" v:shape="_x0000_s1027"> <div class="MsoNormal" style="line-height: 176.0pt;"><br />
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</tbody></table><!--[endif]--><span style="font-size: 10.0pt;"><br clear="all" style="mso-column-break-before: always;" /> 10000<span style="mso-tab-count: 1;"> </span>10000<o:p></o:p></span><br />
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</div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Since IRR is negative <span style="letter-spacing: -.05pt;">h</span>ence r =0%<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-size: 10.0pt;">Project B</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
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o:allowincell="f" path="m,hhl,1993e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 135px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 2px; z-index: -109;"><img height="135" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image012.gif" v:shapes="_x0000_s1045" width="2" /></span><!--[endif]--><!--[if gte vml 1]><v:shape id="_x0000_s1044"
style='position:absolute;left:0;text-align:left;margin-left:-.65pt;
margin-top:.45pt;width:479.25pt;height:0;z-index:-110' coordsize="9585,0"
o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -110;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image007.gif" v:shapes="_x0000_s1044" width="641" /></span><!--[endif]--><!--[if gte vml 1]><v:shape id="_x0000_s1043"
style='position:absolute;left:0;text-align:left;margin-left:172.15pt;
margin-top:8.2pt;width:7.3pt;height:27.4pt;z-index:-111' coordsize="146,548"
o:allowincell="f" path="m,319hhl,347r1,27l2,398r1,23l6,442r2,18l11,477r3,15l18,505r3,8l33,534r12,12l60,548r15,-7l86,532,96,519r9,-17l114,481r8,-24l126,442r3,-14l132,413r3,-16l138,379r2,-18l142,341r1,-21l144,298r1,-23l146,251r,-25l146,214r,-28l145,160r-1,-24l142,114,140,94,138,76,135,60,131,46,127,34r,-1l115,12,102,1,88,,78,4,66,14,56,27,46,43,37,63,29,86r-7,22l18,123r-3,16l12,157,9,175,6,194,4,215,2,236,1,258,,280r,24l,319xe"
filled="f" strokecolor="#696969" strokeweight=".24pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 40px; left: 0px; margin-left: 229px; margin-top: 9px; mso-ignore: vglayout; position: absolute; width: 11px; z-index: -111;"><img height="40" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image013.gif" v:shapes="_x0000_s1043" width="11" /></span><!--[endif]--><span style="font-size: 10.0pt;">Year<span style="mso-tab-count: 1;"> </span><a href="mailto:@30%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF</span></a> @30%<span style="mso-tab-count: 1;"> </span><a href="mailto:PVF@33%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF@33%<span style="mso-tab-count: 1;"> </span></span></a>C.I.<span style="mso-tab-count: 1;"> </span>PV @ 30%<span style="mso-tab-count: 1;"> </span>PV @ 33%<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1052" style='position:absolute;left:0;text-align:left;
margin-left:-.65pt;margin-top:.55pt;width:479.25pt;height:0;z-index:-102'
coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e" filled="f"
strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -102;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1052" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">1<span style="mso-tab-count: 1;"> </span>.769<span style="mso-tab-count: 1;"> </span>.752<span style="mso-tab-count: 1;"> </span>7500<span style="mso-tab-count: 1;"> </span>5768<span style="mso-tab-count: 1;"> </span>5640<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1053" style='position:absolute;left:0;text-align:left;
margin-left:-.65pt;margin-top:.65pt;width:479.25pt;height:0;z-index:-101'
coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e" filled="f"
strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -101;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1053" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">2<span style="mso-tab-count: 1;"> </span>.592<span style="mso-tab-count: 1;"> </span>.565<span style="mso-tab-count: 1;"> </span>7500<span style="mso-tab-count: 1;"> </span>4440<span style="mso-tab-count: 1;"> </span>4238<o:p></o:p></span></div><div align="right" class="MsoNormal" style="margin-right: .5in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 79.0pt; text-align: right; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1054" style='position:absolute;
left:0;text-align:left;margin-left:-.65pt;margin-top:.6pt;width:479.25pt;
height:0;z-index:-100' coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e"
filled="f" strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -100;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1054" width="641" /></span><!--[endif]--><b><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">10208<span style="mso-tab-count: 1;"> </span>9878</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section4"> <div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1055"
style='position:absolute;left:0;text-align:left;margin-left:-.65pt;
margin-top:.7pt;width:479.25pt;height:0;z-index:-99' coordsize="9585,0"
o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -99;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1055" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">Less: PV of<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: -2.8pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Cash Out<span style="letter-spacing: -.05pt;">f</span>low<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; tab-stops: 79.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1056"
style='position:absolute;margin-left:-.65pt;margin-top:.65pt;width:479.25pt;
height:0;z-index:-98' coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e"
filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -98;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1056" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;"><br clear="all" style="mso-column-break-before: always;" /> 10000<span style="mso-tab-count: 1;"> </span>10000<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; tab-stops: 79.0pt; text-autospace: none;"><b><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">208<span style="mso-tab-count: 1;"> </span>(-) 122</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section5"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1057" style='position:absolute;
margin-left:-.65pt;margin-top:.8pt;width:479.25pt;height:0;z-index:-97'
coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e" filled="f"
strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -97;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image014.gif" v:shapes="_x0000_s1057" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 140.0pt; margin-right: 195.75pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 161.0pt 218.0pt; text-autospace: none; text-indent: -48.0pt;"><span style="font-size: 10.0pt;">IRR = 30 <u>+ <span style="mso-tab-count: 1;"> </span>208 <span style="mso-tab-count: 1;"> </span></u>X (33-30) (208-(-122))<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 116.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 183.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">= 30 + <u>624 <span style="mso-tab-count: 1;"> </span></u>=<span style="mso-spacerun: yes;"> </span>31.89 say 32%<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 152.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">330<o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: always;" /> </span> <div class="Section6"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 5.3pt; mso-padding-alt: 0in 0in 0in 0in; mso-table-layout-alt: fixed;"><tbody>
<tr style="height: 17.85pt; mso-yfti-irow: 0;"> <td style="border-bottom: solid black 1.0pt; border: none; height: 17.85pt; mso-border-bottom-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.4pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-size: 10.0pt;">Project C</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div></td> <td colspan="5" style="border-bottom: solid black 1.0pt; border: none; height: 17.85pt; mso-border-bottom-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 399.0pt;" valign="top" width="532"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> </tr>
<tr style="height: 14.3pt; mso-yfti-irow: 1;"> <td style="border-top: none; border: solid black 1.0pt; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Year<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;"><a href="mailto:@26%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF</span></a> @26%<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;"><a href="mailto:PVF@28%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF@28%</span></a><o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.15pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">C.I.<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">PV @ 26%<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.15pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">PV @ 28%<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.35pt; mso-yfti-irow: 2;"> <td style="border-top: none; border: solid black 1.0pt; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">1<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">.794<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">.761<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">2000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">1588<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">1522<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.3pt; mso-yfti-irow: 3;"> <td style="border-top: none; border: solid black 1.0pt; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">2<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">.630<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">.610<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">4000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">2520<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">2440<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.3pt; mso-yfti-irow: 4;"> <td style="border-top: none; border: solid black 1.0pt; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">3<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">.500<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">.477<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">12000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">6000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.3pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">5724<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.35pt; mso-yfti-irow: 5;"> <td style="border-top: none; border: solid black 1.0pt; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:rect id="_x0000_s1060" style='position:absolute;
margin-left:352.6pt;margin-top:166.1pt;width:188pt;height:178pt;z-index:-94;
mso-position-horizontal-relative:page;mso-position-vertical-relative:page'
o:allowincell="f" filled="f" stroked="f"> <v:textbox inset="0,0,0,0"/> </v:rect><![endif]--><!--[if !vml]--><span style="height: 242px; margin-left: 470px; margin-top: 221px; mso-ignore: vglayout; position: absolute; width: 255px; z-index: -94;"> </span></div><table cellpadding="0" cellspacing="0"><tbody>
<tr> <td height="242" style="vertical-align: top;" width="255"><!--[endif]--><!--[if !mso]--><span style="mso-ignore: vglayout; position: absolute; z-index: -94;"> <table cellpadding="0" cellspacing="0"><tbody>
<tr> <td><!--[endif]--> <div class="shape" style="padding: 0pt 0pt 0pt 0pt;" v:shape="_x0000_s1060"> <div class="MsoNormal" style="line-height: 178.0pt;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></div><!--[if !mso]--></td> </tr>
</tbody></table></span><!--[endif]--><!--[if !mso & !vml]--> <!--[endif]--><!--[if !vml]--></td> </tr>
</tbody></table><!--[endif]--><span style="font-size: 10.0pt;"><o:p></o:p></span><br />
</td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">10108<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">9686<o:p></o:p></span></div></td> </tr>
<tr style="height: 28.1pt; mso-yfti-irow: 6;"> <td style="border-top: none; border: solid black 1.0pt; height: 28.1pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Less: PV of<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Out<span style="letter-spacing: -.05pt;">f</span>low<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 28.1pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 28.1pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 28.1pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 28.1pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">10000<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 28.1pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">10000<o:p></o:p></span></div></td> </tr>
<tr style="height: 14.35pt; mso-yfti-irow: 7; mso-yfti-lastrow: yes;"> <td style="border-top: none; border: solid black 1.0pt; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.1pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">NPV<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.15pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">108<o:p></o:p></span></div></td> <td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 14.35pt; mso-border-alt: solid black .5pt; mso-border-left-alt: solid black .5pt; mso-border-top-alt: solid black .5pt; padding: 0in 0in 0in 0in; width: 79.8pt;" valign="top" width="106"> <div class="MsoNormal" style="margin-left: 5.15pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">-314<o:p></o:p></span></div></td> </tr>
</tbody></table><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 96.1pt; margin-right: 227.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 210.0pt; text-align: center; text-autospace: none;"><span style="font-size: 10.0pt;">IRR = 26 <u>+ 108 <span style="mso-tab-count: 1;"> </span></u>X (28-26)<o:p></o:p></span></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 144.1pt; margin-right: 290.1pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><span style="font-size: 10.0pt;">108-(-314)<o:p></o:p></span></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 120.1pt; margin-right: 248.75pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 187.0pt; text-align: center; text-autospace: none;"><span style="font-size: 10.0pt;">= 26 + <u>216 <span style="mso-tab-count: 1;"> </span></u>=<span style="mso-spacerun: yes;"> </span>26.51%<o:p></o:p></span></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 156.1pt; margin-right: 312.1pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><span style="font-size: 10.0pt;">422<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:rect id="_x0000_s1059" style='position:absolute;
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</tbody></table><!--[endif]--><span style="font-size: 10.0pt;"><o:p></o:p></span><br />
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o:allowincell="f" path="m,hhl,2554e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 172px; left: 0px; margin-left: 6px; margin-top: 18px; mso-ignore: vglayout; position: absolute; width: 2px; z-index: -92;"><img height="172" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image019.gif" v:shapes="_x0000_s1062" width="2" /></span><!--[endif]--><!--[if gte vml 1]><v:shape id="_x0000_s1061"
style='position:absolute;left:0;text-align:left;margin-left:5.35pt;
margin-top:14pt;width:479.25pt;height:0;z-index:-93' coordsize="9585,0"
o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: 6px; margin-top: 18px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -93;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1061" width="641" /></span><!--[endif]--><b><span style="font-size: 10.0pt;">Project D</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 1.25in 170.0pt 250.0pt 330.0pt 410.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">Year<span style="mso-tab-count: 1;"> </span><a href="mailto:@37%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF</span></a> @37%<span style="mso-tab-count: 1;"> </span><a href="mailto:PVF@38%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF@38%<span style="mso-tab-count: 1;"> </span></span></a>C.I.<span style="mso-tab-count: 1;"> </span>PV @ 37%<span style="mso-tab-count: 1;"> </span>PV @ 38%<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 1.25in 170.0pt 250.0pt 330.0pt 410.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1069" style='position:absolute;
left:0;text-align:left;margin-left:5.35pt;margin-top:.35pt;width:479.25pt;
height:0;z-index:-85' coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e"
filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="mso-ignore: vglayout; position: relative; z-index: -85;"><span style="height: 2px; left: 0px; left: 6px; position: absolute; top: -1px; width: 641px;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image006.gif" v:shapes="_x0000_s1069" width="641" /></span></span><!--[endif]--><span style="font-size: 10.0pt;">1<span style="mso-tab-count: 1;"> </span>.730<span style="mso-tab-count: 1;"> </span>.725<span style="mso-tab-count: 1;"> </span>10000<span style="mso-tab-count: 1;"> </span>7300<span style="mso-tab-count: 1;"> </span>7250<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 1.25in 170.0pt 250.0pt 330.0pt 410.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1070" style='position:absolute;
left:0;text-align:left;margin-left:5.35pt;margin-top:.3pt;width:479.25pt;
height:0;z-index:-84' coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e"
filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="mso-ignore: vglayout; position: relative; z-index: -84;"><span style="height: 2px; left: 0px; left: 6px; position: absolute; top: -1px; width: 641px;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image006.gif" v:shapes="_x0000_s1070" width="641" /></span></span><!--[endif]--><span style="font-size: 10.0pt;">2<span style="mso-tab-count: 1;"> </span>.533<span style="mso-tab-count: 1;"> </span>.525<span style="mso-tab-count: 1;"> </span>3000<span style="mso-tab-count: 1;"> </span>1599<span style="mso-tab-count: 1;"> </span>1575<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 1.25in 170.0pt 250.0pt 330.0pt 410.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1071" style='position:absolute;
left:0;text-align:left;margin-left:5.35pt;margin-top:.3pt;width:479.25pt;
height:0;z-index:-83' coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e"
filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="mso-ignore: vglayout; position: relative; z-index: -83;"><span style="height: 2px; left: 0px; left: 6px; position: absolute; top: -1px; width: 641px;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image006.gif" v:shapes="_x0000_s1071" width="641" /></span></span><!--[endif]--><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">3<span style="mso-tab-count: 1;"> </span>.389<span style="mso-tab-count: 1;"> </span>.381<span style="mso-tab-count: 1;"> </span>3000<span style="mso-tab-count: 1;"> </span>1167<span style="mso-tab-count: 1;"> </span>1143</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section7"> <div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: -3.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1072"
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margin-top:.65pt;width:479.25pt;height:0;z-index:-82' coordsize="9585,0"
o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: 6px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -82;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1072" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">PVF of cash<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt;">Inflow<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1073"
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margin-top:.35pt;width:479.25pt;height:0;z-index:-81' coordsize="9585,0"
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</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; tab-stops: 79.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">10000<span style="mso-tab-count: 1;"> </span>10000<o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section8"> <div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 330.0pt 410.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
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margin-left:5.35pt;margin-top:.7pt;width:479.25pt;height:0;z-index:-79'
coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e" filled="f"
strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; margin-left: 6px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -79;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1075" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 96.1pt; margin-right: 233.9pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 207.0pt; text-align: center; text-autospace: none;"><span style="font-size: 10.0pt;">IRR = 37 + <u><span style="mso-spacerun: yes;"> </span>66 <span style="mso-tab-count: 1;"> </span></u>X(38-37)<o:p></o:p></span></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 156.1pt; margin-right: 286.1pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: center; text-autospace: none;"><span style="font-size: 10.0pt;">66(-(-32)<o:p></o:p></span></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 120.1pt; margin-right: 257.75pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 181.0pt; text-align: center; text-autospace: none;"><span style="font-size: 10.0pt;">= 37 + 66<span style="mso-tab-count: 1;"> </span>= 37.67%<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 158.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1077"
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margin-top:-.95pt;width:14.95pt;height:0;z-index:-77' coordsize="299,0"
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<tr> <td><!--[endif]--> <div class="shape" style="padding: 0pt 0pt 0pt 0pt;" v:shape="_x0000_s1076"> <div class="MsoNormal" style="line-height: 93.0pt;"><br />
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</tbody></table><!--[endif]--><span style="font-size: 10.0pt;">(a)<span style="letter-spacing: 1.65pt;"> </span>(iv) Net Present Value NPV = PV of<span style="letter-spacing: -.05pt;"> </span>Cash Inflow – PV of Cash outflow<o:p></o:p></span><br />
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; tab-stops: 183.0pt; text-autospace: none;"><span style="font-size: 10.0pt;"><span style="mso-tab-count: 1;"> </span><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-size: 10.0pt;">Project A</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 1.25in 170.0pt 250.0pt 330.0pt 410.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1085" style='position:absolute;
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o:allowincell="f" path="m,hhl,2278e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 154px; left: 0px; margin-left: 113px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 2px; z-index: -74;"><img height="154" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image022.gif" v:shapes="_x0000_s1080" width="2" /></span><!--[endif]--><!--[if gte vml 1]><v:shape id="_x0000_s1079"
style='position:absolute;left:0;text-align:left;margin-left:5.6pt;
margin-top:.6pt;width:0;height:113.95pt;z-index:-75' coordsize="0,2279"
o:allowincell="f" path="m,hhl,2278e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 154px; left: 0px; margin-left: 6px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 2px; z-index: -75;"><img height="154" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image023.gif" v:shapes="_x0000_s1079" width="2" /></span><!--[endif]--><!--[if gte vml 1]><v:shape id="_x0000_s1078"
style='position:absolute;left:0;text-align:left;margin-left:5.35pt;
margin-top:.35pt;width:479.25pt;height:0;z-index:-76' coordsize="9585,0"
o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="mso-ignore: vglayout; position: relative; z-index: -76;"><span style="height: 2px; left: 0px; left: 6px; position: absolute; top: -1px; width: 641px;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image006.gif" v:shapes="_x0000_s1078" width="641" /></span></span><!--[endif]--><span style="font-size: 10.0pt;">Year<span style="mso-tab-count: 1;"> </span>C.I.<span style="mso-tab-count: 1;"> </span><a href="mailto:PV@10%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PV@10%<span style="mso-tab-count: 1;"> </span></span></a><a href="mailto:PV@30%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PV@30%<span style="mso-tab-count: 1;"> </span></span></a><a href="mailto:PV@10%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PV@10%<span style="mso-tab-count: 1;"> </span></span></a><a href="mailto:PV@30%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PV@30%</span></a><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 1.25in 170.0pt 250.0pt 330.0pt 410.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1086" style='position:absolute;
left:0;text-align:left;margin-left:5.35pt;margin-top:.45pt;width:479.25pt;
height:0;z-index:-68' coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e"
filled="f" strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: 6px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -68;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image007.gif" v:shapes="_x0000_s1086" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">1<span style="mso-tab-count: 1;"> </span>10000<span style="mso-tab-count: 1;"> </span>.909<span style="mso-tab-count: 1;"> </span>.769<span style="mso-tab-count: 1;"> </span>9090<span style="mso-tab-count: 1;"> </span>7690<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 1.25in; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1087" style='position:absolute;left:0;text-align:left;
margin-left:5.35pt;margin-top:.45pt;width:479.25pt;height:0;z-index:-67'
coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e" filled="f"
strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: 6px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -67;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image007.gif" v:shapes="_x0000_s1087" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">2<span style="mso-tab-count: 1;"> </span>-<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 1.25in; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1088" style='position:absolute;left:0;text-align:left;
margin-left:5.35pt;margin-top:.55pt;width:479.25pt;height:0;z-index:-66'
coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e" filled="f"
strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: 6px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -66;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1088" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">3<span style="mso-tab-count: 1;"> </span>-</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section9"> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1089" style='position:absolute;
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strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; margin-left: 6px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -65;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1089" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 11.0pt; margin-right: -3.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1090"
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margin-top:0;width:479.25pt;height:0;z-index:-64' coordsize="9585,0"
o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="mso-ignore: vglayout; position: relative; z-index: -64;"><span style="height: 2px; left: 0px; left: 6px; position: absolute; top: -1px; width: 641px;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1090" width="641" /></span></span><!--[endif]--><span style="font-size: 10.0pt;">Less: PV of<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">Out<span style="letter-spacing: -.05pt;">f</span>low</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-column-break-before: always;" /> </span> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; tab-stops: 79.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">9090<span style="mso-tab-count: 1;"> </span>7690<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; tab-stops: 79.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">10000<span style="mso-tab-count: 1;"> </span>10000<o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section10"> <div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 330.0pt 410.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1091" style='position:absolute;left:0;text-align:left;
margin-left:5.35pt;margin-top:.8pt;width:479.25pt;height:0;z-index:-63'
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strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: 6px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -63;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image014.gif" v:shapes="_x0000_s1091" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">NPV<span style="mso-tab-count: 1;"> </span>-910<span style="mso-tab-count: 1;"> </span>-2310</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1092" style='position:absolute;
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</div><div class="MsoNormal" style="margin-left: 11.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-size: 10.0pt;">Project B</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: always;" /> </span> <div class="Section11"> <div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
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o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 3px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -59;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image014.gif" v:shapes="_x0000_s1095" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">Year<span style="mso-tab-count: 1;"> </span><a href="mailto:PVF@10%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF@10%<span style="mso-tab-count: 1;"> </span></span></a><a href="mailto:PVF@30%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF@30%<span style="mso-tab-count: 1;"> </span></span></a>C.I<span style="mso-tab-count: 1;"> </span>PV@10%<span style="mso-tab-count: 1;"> </span><a href="mailto:PV@30%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PV@30%</span></a><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1103" style='position:absolute;left:0;text-align:left;
margin-left:-.65pt;margin-top:.35pt;width:479.25pt;height:0;z-index:-51'
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</tbody></table><!--[endif]--><span style="font-size: 10.0pt;"><br clear="all" style="mso-column-break-before: always;" /> 10000<span style="mso-tab-count: 1;"> </span>10000<o:p></o:p></span><br />
</div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section13"> <div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
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o:allowincell="f" path="m,hhl,2278e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 154px; left: 0px; margin-left: 105px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 2px; z-index: -42;"><img height="154" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image022.gif" v:shapes="_x0000_s1112" width="2" /></span><!--[endif]--><!--[if gte vml 1]><v:shape id="_x0000_s1111"
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margin-top:.4pt;width:479.25pt;height:0;z-index:-44' coordsize="9585,0"
o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -44;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image007.gif" v:shapes="_x0000_s1110" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">Year<span style="mso-tab-count: 1;"> </span><a href="mailto:PVF@10%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF@10%<span style="mso-tab-count: 1;"> </span></span></a><a href="mailto:PVF@30%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF@30%<span style="mso-tab-count: 1;"> </span></span></a>C.I<span style="mso-tab-count: 1;"> </span>PV@10%<span style="mso-tab-count: 1;"> </span><a href="mailto:PV@30%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PV@30%</span></a><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1118" style='position:absolute;left:0;text-align:left;
margin-left:-.65pt;margin-top:.5pt;width:479.25pt;height:0;z-index:-36'
coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e" filled="f"
strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -36;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1118" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">1<span style="mso-tab-count: 1;"> </span>.908<span style="mso-tab-count: 1;"> </span>.769<span style="mso-tab-count: 1;"> </span>2000<span style="mso-tab-count: 1;"> </span>1818<span style="mso-tab-count: 1;"> </span>1538<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1119" style='position:absolute;left:0;text-align:left;
margin-left:-.65pt;margin-top:.45pt;width:479.25pt;height:0;z-index:-35'
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strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -35;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image007.gif" v:shapes="_x0000_s1119" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">2<span style="mso-tab-count: 1;"> </span>.826<span style="mso-tab-count: 1;"> </span>.592<span style="mso-tab-count: 1;"> </span>4000<span style="mso-tab-count: 1;"> </span>3304<span style="mso-tab-count: 1;"> </span>2368<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1120" style='position:absolute;left:0;text-align:left;
margin-left:-.65pt;margin-top:.5pt;width:479.25pt;height:0;z-index:-34'
coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e" filled="f"
strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -34;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1120" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">3<span style="mso-tab-count: 1;"> </span>.751<span style="mso-tab-count: 1;"> </span>.455<span style="mso-tab-count: 1;"> </span>12000<span style="mso-tab-count: 1;"> </span>9012<span style="mso-tab-count: 1;"> </span>5460<o:p></o:p></span></div><div align="right" class="MsoNormal" style="margin-right: 30.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 79.0pt; text-align: right; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1121" style='position:absolute;
left:0;text-align:left;margin-left:-.65pt;margin-top:.55pt;width:479.25pt;
height:0;z-index:-33' coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e"
filled="f" strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -33;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1121" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">14134<span style="mso-tab-count: 1;"> </span>9366</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section14"> <div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: -3.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1122"
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o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -32;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1122" width="641" /></span><!--[endif]--><!--[if gte vml 1]><v:rect id="_x0000_s1093"
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<tr> <td height="244" style="vertical-align: top;" width="204"><!--[endif]--><!--[if !mso]--><span style="left: 0pt; mso-ignore: vglayout; position: absolute; z-index: -61;"> <table cellpadding="0" cellspacing="0"><tbody>
<tr> <td><!--[endif]--> <div class="shape" style="padding: 0pt 0pt 0pt 0pt;" v:shape="_x0000_s1093"> <div class="MsoNormal" style="line-height: 180.0pt;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
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</tbody></table></span><!--[endif]--><!--[if !mso & !vml]--> <!--[endif]--><!--[if !vml]--></td> </tr>
</tbody></table><!--[endif]--><span style="font-size: 10.0pt;">Less: PV of<o:p></o:p></span><br />
<div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">Out<span style="letter-spacing: -.05pt;">f</span>low</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-column-break-before: always;" /> </span> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; tab-stops: 79.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">10000<span style="mso-tab-count: 1;"> </span>10000<o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section15"> <div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1123" style='position:absolute;left:0;text-align:left;
margin-left:-.65pt;margin-top:.75pt;width:479.25pt;height:0;z-index:-31'
coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e" filled="f"
strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -31;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1123" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">NPV<span style="mso-tab-count: 1;"> </span>4134<span style="mso-tab-count: 1;"> </span>-634</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1124" style='position:absolute;
margin-left:-.65pt;margin-top:.85pt;width:479.25pt;height:0;z-index:-30'
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strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -30;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image014.gif" v:shapes="_x0000_s1124" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><b><span style="font-size: 10.0pt;">Project D</span></b><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
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margin-left:478.4pt;margin-top:.75pt;width:0;height:113.95pt;z-index:-22'
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strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 154px; left: 0px; margin-left: 637px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 2px; z-index: -22;"><img height="154" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image022.gif" v:shapes="_x0000_s1132" width="2" /></span><!--[endif]--><!--[if gte vml 1]><v:shape id="_x0000_s1131"
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margin-top:.75pt;width:0;height:113.95pt;z-index:-23' coordsize="0,2279"
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style='position:absolute;left:0;text-align:left;margin-left:-.65pt;
margin-top:.5pt;width:479.25pt;height:0;z-index:-29' coordsize="9585,0"
o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -29;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1125" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">Year<span style="mso-tab-count: 1;"> </span><a href="mailto:PVF@10%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF@10%<span style="mso-tab-count: 1;"> </span></span></a><a href="mailto:PVF@30%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PVF@30%<span style="mso-tab-count: 1;"> </span></span></a>C.I<span style="mso-tab-count: 1;"> </span>PV@10%<span style="mso-tab-count: 1;"> </span><a href="mailto:PV@30%25"><span style="color: windowtext; text-decoration: none; text-underline: none;">PV@30%</span></a><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1133" style='position:absolute;left:0;text-align:left;
margin-left:-.65pt;margin-top:.6pt;width:479.25pt;height:0;z-index:-21'
coordsize="9585,0" o:allowincell="f" path="m,hhl9585,e" filled="f"
strokeweight=".20458mm"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -21;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1133" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">1<span style="mso-tab-count: 1;"> </span>.909<span style="mso-tab-count: 1;"> </span>.769<span style="mso-tab-count: 1;"> </span>10000<span style="mso-tab-count: 1;"> </span>9090<span style="mso-tab-count: 1;"> </span>7690<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 84.0pt 164.0pt 244.0pt 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
id="_x0000_s1134" style='position:absolute;left:0;text-align:left;
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filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -18;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image008.gif" v:shapes="_x0000_s1136" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">13821<span style="mso-tab-count: 1;"> </span>10831</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section16"> <div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: -3.05pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><!--[if gte vml 1]><v:shape id="_x0000_s1137"
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o:allowincell="f" path="m,hhl9585,e" filled="f" strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; left: 0px; margin-left: -2px; margin-top: 0px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -17;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image014.gif" v:shapes="_x0000_s1137" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;">Less: PV of<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><span style="font-size: 10.0pt; mso-text-raise: -.5pt; position: relative; top: .5pt;">Out<span style="letter-spacing: -.05pt;">f</span>low</span><span style="font-size: 10.0pt;"><o:p></o:p></span></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-column-break-before: always;" /> </span> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; tab-stops: 79.0pt; text-autospace: none;"><span style="font-size: 10.0pt;">10000<span style="mso-tab-count: 1;"> </span>10000<o:p></o:p></span></div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: auto;" /> </span> <div class="Section17"> <div class="MsoNormal" style="margin-left: 5.0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 4.5in 404.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
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</div><div class="MsoNormal" style="margin-left: 69.9pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 217.0pt 290.0pt 363.0pt 437.0pt; text-autospace: none;"><!--[if gte vml 1]><v:shape
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coordsize="146,548" o:allowincell="f" path="m,319hhl,347r1,27l2,398r1,23l6,442r2,18l11,477r3,15l18,505r3,8l33,534r12,12l60,548r15,-7l86,532,96,519r9,-17l114,481r8,-24l126,442r3,-14l132,413r3,-16l138,379r2,-18l142,341r1,-21l144,298r1,-23l146,251r,-25l146,214r,-28l145,160r-1,-24l142,114,140,94,138,76,135,60,131,46,127,34r,-1l115,12,102,1,88,,78,4,66,14,56,27,46,43,37,63,29,86r-7,22l18,123r-3,16l12,157,9,175,6,194,4,215,2,236,1,258,,280r,24l,319xe"
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id="_x0000_s1148" style='position:absolute;left:0;text-align:left;
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id="_x0000_s1149" style='position:absolute;left:0;text-align:left;
margin-left:-.65pt;margin-top:.7pt;width:479.2pt;height:0;z-index:-5'
coordsize="9584,0" o:allowincell="f" path="m,hhl9584,e" filled="f"
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id="_x0000_s1150" style='position:absolute;left:0;text-align:left;
margin-left:-.65pt;margin-top:.75pt;width:479.2pt;height:0;z-index:-4'
coordsize="9584,0" o:allowincell="f" path="m,hhl9584,e" filled="f"
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strokeweight=".58pt"> <v:path arrowok="t"/> </v:shape><![endif]--><!--[if !vml]--><span style="height: 2px; margin-left: -2px; margin-top: 1px; mso-ignore: vglayout; position: absolute; width: 641px; z-index: -1;"><img height="2" src="file:///F:/DOCUME~1/satish/LOCALS~1/Temp/msohtml1/01/clip_image007.gif" v:shapes="_x0000_s1153" width="641" /></span><!--[endif]--><span style="font-size: 10.0pt;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 18.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">b) Payback and ARR are unsound <span style="letter-spacing: -.1pt;">m</span>ethod for choosing between the invest<span style="letter-spacing: -.1pt;">m</span>ent Projects. Between the two ti<span style="letter-spacing: -.1pt;">m</span>es adjusted (DCF) inv<span style="letter-spacing: -.05pt;">e</span>st<span style="letter-spacing: -.1pt;">m</span>ent<span style="letter-spacing: .05pt;"> </span>criteria,<span style="letter-spacing: .05pt;"> </span>NPV<span style="letter-spacing: .05pt;"> </span>and<span style="letter-spacing: .05pt;"> </span>IRR.<span style="letter-spacing: .05pt;"> </span>NPV<span style="letter-spacing: .05pt;"> </span>gives consistent<span style="letter-spacing: .05pt;"> </span>results.<span style="letter-spacing: .05pt;"> </span>If the<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">P</span>roj<span style="letter-spacing: -.05pt;">e</span>cts<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">a</span>re<span style="letter-spacing: .05pt;"> </span>in<span style="letter-spacing: -.05pt;">de</span>pendent<span style="letter-spacing: .05pt;"> </span>(and<span style="letter-spacing: .05pt;"> </span>there<span style="letter-spacing: .05pt;"> </span>is<span style="letter-spacing: .05pt;"> </span>no<span style="letter-spacing: .1pt;"> </span>capital<span style="letter-spacing: .1pt;"> </span>rationing)<span style="letter-spacing: .1pt;"> </span>either IRR , NPV can be used since the sa<span style="letter-spacing: -.1pt;">m</span>e set of projects<span style="letter-spacing: .05pt;"> </span>will<span style="letter-spacing: .05pt;"> </span>be<span style="letter-spacing: .05pt;"> </span>accepted<span style="letter-spacing: .05pt;"> </span>by<span style="letter-spacing: .05pt;"> </span>any<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>the <span style="letter-spacing: -.1pt;">m</span>ethods.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 5.0pt; margin-right: 18.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><br />
</div></div><span style="font-family: "Times New Roman"; font-size: 10.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br clear="all" style="mso-break-type: section-break; page-break-before: always;" /> </span> <div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">In<span style="letter-spacing: 2.8pt;"> </span>the<span style="letter-spacing: 2.8pt;"> </span><span style="letter-spacing: -.05pt;">g</span><span style="letter-spacing: .05pt;">i</span>ven<span style="letter-spacing: 2.8pt;"> </span>ca<span style="letter-spacing: -.05pt;">s</span>e,<span style="letter-spacing: 2.8pt;"> </span>exce<span style="letter-spacing: -.05pt;">p</span>t<span style="letter-spacing: 2.8pt;"> </span>Pro<span style="letter-spacing: -.05pt;">j</span>ect<span style="letter-spacing: 2.85pt;"> </span>A<span style="letter-spacing: 2.85pt;"> </span>all<span style="letter-spacing: 2.85pt;"> </span>t<span style="letter-spacing: -.05pt;">h</span>e<span style="letter-spacing: 2.85pt;"> </span>t<span style="letter-spacing: -.05pt;">h</span>ree<span style="letter-spacing: 2.85pt;"> </span>projects<span style="letter-spacing: 2.7pt;"> </span>sho<span style="letter-spacing: -.05pt;">u</span>ld<span style="letter-spacing: 2.8pt;"> </span>be<span style="letter-spacing: 2.8pt;"> </span>ac<span style="letter-spacing: -.05pt;">c</span>epted<span style="letter-spacing: 2.8pt;"> </span>if<span style="letter-spacing: 2.75pt;"> </span>the discount<span style="letter-spacing: 1.45pt;"> </span>rate<span style="letter-spacing: 1.45pt;"> </span>is<span style="letter-spacing: 1.45pt;"> </span>10%.<span style="letter-spacing: 1.45pt;"> </span>Only<span style="letter-spacing: 1.45pt;"> </span>project<span style="letter-spacing: 1.5pt;"> </span>B<span style="letter-spacing: 1.5pt;"> </span>&<span style="letter-spacing: 1.5pt;"> </span>D<span style="letter-spacing: 1.5pt;"> </span>should<span style="letter-spacing: 1.5pt;"> </span>be<span style="letter-spacing: 1.5pt;"> </span>undertaken<span style="letter-spacing: 1.5pt;"> </span>if<span style="letter-spacing: 1.5pt;"> </span>the<span style="letter-spacing: 1.5pt;"> </span>discount<span style="letter-spacing: 1.5pt;"> </span>rate<span style="letter-spacing: 1.5pt;"> </span>is<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 414.2pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">30%<o:p></o:p></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 6.0pt; margin-right: 3.85pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span style="font-size: 10.0pt;">If it is assu<span style="letter-spacing: -.1pt;">m</span>ed that the projects are <span style="letter-spacing: -.1pt;">m</span>utually<span style="letter-spacing: .05pt;"> </span>exclusive<span style="letter-spacing: .05pt;"> </span>then<span style="letter-spacing: .05pt;"> </span>und<span style="letter-spacing: -.1pt;">e</span>r<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>assu<span style="letter-spacing: -.1pt;">m</span>ption<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>30% discount<span style="letter-spacing: 1.15pt;"> </span>rate,<span style="letter-spacing: 1.25pt;"> </span>the<span style="letter-spacing: 1.25pt;"> </span>choice<span style="letter-spacing: 1.25pt;"> </span>is<span style="letter-spacing: 1.25pt;"> </span>between<span style="letter-spacing: 1.25pt;"> </span>B<span style="letter-spacing: 1.25pt;"> </span>and<span style="letter-spacing: 1.25pt;"> </span>D,<span style="letter-spacing: 1.3pt;"> </span>(A<span style="letter-spacing: 1.25pt;"> </span>and<span style="letter-spacing: 1.25pt;"> </span>C<span style="letter-spacing: 1.25pt;"> </span>are<span style="letter-spacing: 1.25pt;"> </span>unprofitable).<span style="letter-spacing: 1.25pt;"> </span>Both<span style="letter-spacing: 1.25pt;"> </span>criteria IRR and NPV give the sa<span style="letter-spacing: -.1pt;">m</span>e results D is the best. Under the assu<span style="letter-spacing: -.1pt;">m</span>ption of 10% discount rate ranking according to IRR<span style="letter-spacing: .05pt;"> </span>&<span style="letter-spacing: .1pt;"> </span>NPV<span style="letter-spacing: .1pt;"> </span>con<span style="letter-spacing: -.05pt;">f</span>lict<span style="letter-spacing: .1pt;"> </span>(ex<span style="letter-spacing: -.05pt;">c</span>ept<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.05pt;">f</span>or<span style="letter-spacing: .1pt;"> </span>pr<span style="letter-spacing: -.05pt;">o</span><span style="letter-spacing: .05pt;">j</span>e<span style="letter-spacing: -.05pt;">c</span>t<span style="letter-spacing: .1pt;"> </span>A.)<span style="letter-spacing: .1pt;"> </span>If<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .1pt;"> </span>IRR<span style="letter-spacing: .1pt;"> </span>rule<span style="letter-spacing: .1pt;"> </span>is followed project D should be acce<span style="letter-spacing: -.05pt;">p</span>ted. But t<span style="letter-spacing: -.05pt;">h</span>e N<span style="letter-spacing: -.05pt;">P</span>V rule tells that <span style="letter-spacing: -.05pt;">P</span>roject C is the best. The NPV rule generally gives consistent<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">r</span>esults<span style="letter-spacing: .1pt;"> </span>in<span style="letter-spacing: .1pt;"> </span><span style="letter-spacing: -.05pt;">c</span>on<span style="letter-spacing: -.05pt;">f</span>ir<span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">i</span>ng<span style="letter-spacing: .1pt;"> </span>with<span style="letter-spacing: .1pt;"> </span>the<span style="letter-spacing: .1pt;"> </span>wealth <span style="letter-spacing: -.1pt;">m</span>ax<span style="letter-spacing: .1pt;">i</span><span style="letter-spacing: -.1pt;">m</span><span style="letter-spacing: .05pt;">i</span>zation principal. Therefore Pr<span style="letter-spacing: -.05pt;">o</span><span style="letter-spacing: .05pt;">j</span>ect<span style="letter-spacing: -.05pt;"> </span>C should be acce<span style="letter-spacing: -.05pt;">p</span>ted following the NPV rule.<o:p></o:p></span></div></div>Anonymoushttp://www.blogger.com/profile/05041454345896847929noreply@blogger.com0