Financial ManagementQuestion 5549 of 217
All Questions A` 1,50,000, ` 1,85,000, ` 3,45,000
B`1,65,000, ` 1,95,500, ` 3,55,000
C` 1,60,000, ` 1,91,500, ` 3,35,000
FINANCIAL MANAGEMENT AND
STRATEGIC MANAGEMENT
D` 1,70,000, ` 1,90,000, ` 3,40,000
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Correct Answer
✅ Option C — ` 1,60,000, ` 1,91,500, ` 3,35,000 FINANCIAL MANAGEMENT AND STRATEGIC MANAGEMENT
All Options:
- A` 1,50,000, ` 1,85,000, ` 3,45,000
- B`1,65,000, ` 1,95,500, ` 3,55,000
- C` 1,60,000, ` 1,91,500, ` 3,35,000 FINANCIAL MANAGEMENT AND STRATEGIC MANAGEMENT ✓
- D` 1,70,000, ` 1,90,000, ` 3,40,000
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Detailed Solution & Explanation
Correct Answer: Option **C**
Explanation:
To find the Cash Inflow after Taxes (CFAT) for Year 1, Year 2, and Year 3, we first compute the Profit before Taxes (PBT), apply the tax rate of 30% to find the Profit after Taxes (PAT), and then add back the non-cash depreciation expense.
* **For Year 1:**
* Additional Sales Units = units, Selling Price = per unit
* Sales Revenue =
* Variable Cost =
* Additional Fixed Cost =
* Savings in breakages =
* Depreciation =
*
*
* \displaystyle ' in math mode at position 68: … 0.30) = 70,000̲<br> *" style="color:#cc0000">\\text{PAT}_{\\text{Year 1}} = 1,00,000 \\times (1 - 0.30) = 70,000\displaystyle <br> *</span>\\text{CFAT}_{\\text{Year 1}} = 70,000 + 90,000 = 1,60,000<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo><mo>∗</mo><mo>∗</mo><mi>F</mi><mi>o</mi><mi>r</mi><mi>Y</mi><mi>e</mi><mi>a</mi><mi>r</mi><mn>2</mn><mo>:</mo><mo>∗</mo><mo>∗</mo><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex"><br>* **For Year 2:**<br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span><span class="mspace" style="margin-right:0.2222em;"></span><span class="mbin">∗</span><span class="mspace" style="margin-right:0.2222em;"></span></span><span class="base"><span class="strut" style="height:0.6833em;"></span><span class="mord">∗</span><span class="mord mathnormal" style="margin-right:0.13889em;">F</span><span class="mord mathnormal" style="margin-right:0.02778em;">or</span><span class="mord mathnormal" style="margin-right:0.22222em;">Y</span><span class="mord mathnormal">e</span><span class="mord mathnormal">a</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mord">2</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">:</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mord">∗</span><span class="mord">∗</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{PBT}_{\\text{Year 2}} = 1,45,000<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo stretchy="false">(</mo><mi>c</mi><mi>a</mi><mi>l</mi><mi>c</mi><mi>u</mi><mi>l</mi><mi>a</mi><mi>t</mi><mi>e</mi><mi>d</mi><mi>i</mi><mi>n</mi><mi>Q</mi><mi>u</mi><mi>e</mi><mi>s</mi><mi>t</mi><mi>i</mi><mi>o</mi><mi>n</mi><mn>1</mn><mo stretchy="false">)</mo><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex">(calculated in Question 1)<br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:1em;vertical-align:-0.25em;"></span><span class="mopen">(</span><span class="mord mathnormal">c</span><span class="mord mathnormal">a</span><span class="mord mathnormal" style="margin-right:0.01968em;">l</span><span class="mord mathnormal">c</span><span class="mord mathnormal">u</span><span class="mord mathnormal" style="margin-right:0.01968em;">l</span><span class="mord mathnormal">a</span><span class="mord mathnormal">t</span><span class="mord mathnormal">e</span><span class="mord mathnormal">d</span><span class="mord mathnormal">in</span><span class="mord mathnormal">Q</span><span class="mord mathnormal">u</span><span class="mord mathnormal">es</span><span class="mord mathnormal">t</span><span class="mord mathnormal">i</span><span class="mord mathnormal">o</span><span class="mord mathnormal">n</span><span class="mord">1</span><span class="mclose">)</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{PAT}_{\\text{Year 2}} = 1,45,000 \\times (1 - 0.30) = 1,01,500<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex"><br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{CFAT}_{\\text{Year 2}} = 1,01,500 + 90,000 = 1,91,500<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo><mo>∗</mo><mo>∗</mo><mi>F</mi><mi>o</mi><mi>r</mi><mi>Y</mi><mi>e</mi><mi>a</mi><mi>r</mi><mn>3</mn><mo>:</mo><mo>∗</mo><mo>∗</mo><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex"><br>* **For Year 3:**<br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span><span class="mspace" style="margin-right:0.2222em;"></span><span class="mbin">∗</span><span class="mspace" style="margin-right:0.2222em;"></span></span><span class="base"><span class="strut" style="height:0.6833em;"></span><span class="mord">∗</span><span class="mord mathnormal" style="margin-right:0.13889em;">F</span><span class="mord mathnormal" style="margin-right:0.02778em;">or</span><span class="mord mathnormal" style="margin-right:0.22222em;">Y</span><span class="mord mathnormal">e</span><span class="mord mathnormal">a</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mord">3</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">:</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mord">∗</span><span class="mord">∗</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{PBT}_{\\text{Year 3}} = 3,50,000<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo stretchy="false">(</mo><mi>c</mi><mi>a</mi><mi>l</mi><mi>c</mi><mi>u</mi><mi>l</mi><mi>a</mi><mi>t</mi><mi>e</mi><mi>d</mi><mi>i</mi><mi>n</mi><mi>Q</mi><mi>u</mi><mi>e</mi><mi>s</mi><mi>t</mi><mi>i</mi><mi>o</mi><mi>n</mi><mn>1</mn><mo stretchy="false">)</mo><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex">(calculated in Question 1)<br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:1em;vertical-align:-0.25em;"></span><span class="mopen">(</span><span class="mord mathnormal">c</span><span class="mord mathnormal">a</span><span class="mord mathnormal" style="margin-right:0.01968em;">l</span><span class="mord mathnormal">c</span><span class="mord mathnormal">u</span><span class="mord mathnormal" style="margin-right:0.01968em;">l</span><span class="mord mathnormal">a</span><span class="mord mathnormal">t</span><span class="mord mathnormal">e</span><span class="mord mathnormal">d</span><span class="mord mathnormal">in</span><span class="mord mathnormal">Q</span><span class="mord mathnormal">u</span><span class="mord mathnormal">es</span><span class="mord mathnormal">t</span><span class="mord mathnormal">i</span><span class="mord mathnormal">o</span><span class="mord mathnormal">n</span><span class="mord">1</span><span class="mclose">)</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{PAT}_{\\text{Year 3}} = 3,50,000 \\times (1 - 0.30) = 2,45,000<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex"><br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{CFAT}_{\\text{Year 3}} = 2,45,000 + 90,000 = 3,35,000` 1,60,000` 1,91,500` 3,35,000$ respectively.
Hence, **Option C** is the correct answer.
* **For Year 1:**
* Additional Sales Units = units, Selling Price = per unit
* Sales Revenue =
* Variable Cost =
* Additional Fixed Cost =
* Savings in breakages =
* Depreciation =
*
*
* \displaystyle ' in math mode at position 68: … 0.30) = 70,000̲<br> *" style="color:#cc0000">\\text{PAT}_{\\text{Year 1}} = 1,00,000 \\times (1 - 0.30) = 70,000\displaystyle <br> *</span>\\text{CFAT}_{\\text{Year 1}} = 70,000 + 90,000 = 1,60,000<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo><mo>∗</mo><mo>∗</mo><mi>F</mi><mi>o</mi><mi>r</mi><mi>Y</mi><mi>e</mi><mi>a</mi><mi>r</mi><mn>2</mn><mo>:</mo><mo>∗</mo><mo>∗</mo><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex"><br>* **For Year 2:**<br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span><span class="mspace" style="margin-right:0.2222em;"></span><span class="mbin">∗</span><span class="mspace" style="margin-right:0.2222em;"></span></span><span class="base"><span class="strut" style="height:0.6833em;"></span><span class="mord">∗</span><span class="mord mathnormal" style="margin-right:0.13889em;">F</span><span class="mord mathnormal" style="margin-right:0.02778em;">or</span><span class="mord mathnormal" style="margin-right:0.22222em;">Y</span><span class="mord mathnormal">e</span><span class="mord mathnormal">a</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mord">2</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">:</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mord">∗</span><span class="mord">∗</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{PBT}_{\\text{Year 2}} = 1,45,000<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo stretchy="false">(</mo><mi>c</mi><mi>a</mi><mi>l</mi><mi>c</mi><mi>u</mi><mi>l</mi><mi>a</mi><mi>t</mi><mi>e</mi><mi>d</mi><mi>i</mi><mi>n</mi><mi>Q</mi><mi>u</mi><mi>e</mi><mi>s</mi><mi>t</mi><mi>i</mi><mi>o</mi><mi>n</mi><mn>1</mn><mo stretchy="false">)</mo><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex">(calculated in Question 1)<br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:1em;vertical-align:-0.25em;"></span><span class="mopen">(</span><span class="mord mathnormal">c</span><span class="mord mathnormal">a</span><span class="mord mathnormal" style="margin-right:0.01968em;">l</span><span class="mord mathnormal">c</span><span class="mord mathnormal">u</span><span class="mord mathnormal" style="margin-right:0.01968em;">l</span><span class="mord mathnormal">a</span><span class="mord mathnormal">t</span><span class="mord mathnormal">e</span><span class="mord mathnormal">d</span><span class="mord mathnormal">in</span><span class="mord mathnormal">Q</span><span class="mord mathnormal">u</span><span class="mord mathnormal">es</span><span class="mord mathnormal">t</span><span class="mord mathnormal">i</span><span class="mord mathnormal">o</span><span class="mord mathnormal">n</span><span class="mord">1</span><span class="mclose">)</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{PAT}_{\\text{Year 2}} = 1,45,000 \\times (1 - 0.30) = 1,01,500<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex"><br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{CFAT}_{\\text{Year 2}} = 1,01,500 + 90,000 = 1,91,500<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo><mo>∗</mo><mo>∗</mo><mi>F</mi><mi>o</mi><mi>r</mi><mi>Y</mi><mi>e</mi><mi>a</mi><mi>r</mi><mn>3</mn><mo>:</mo><mo>∗</mo><mo>∗</mo><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex"><br>* **For Year 3:**<br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span><span class="mspace" style="margin-right:0.2222em;"></span><span class="mbin">∗</span><span class="mspace" style="margin-right:0.2222em;"></span></span><span class="base"><span class="strut" style="height:0.6833em;"></span><span class="mord">∗</span><span class="mord mathnormal" style="margin-right:0.13889em;">F</span><span class="mord mathnormal" style="margin-right:0.02778em;">or</span><span class="mord mathnormal" style="margin-right:0.22222em;">Y</span><span class="mord mathnormal">e</span><span class="mord mathnormal">a</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mord">3</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">:</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mord">∗</span><span class="mord">∗</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{PBT}_{\\text{Year 3}} = 3,50,000<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo stretchy="false">(</mo><mi>c</mi><mi>a</mi><mi>l</mi><mi>c</mi><mi>u</mi><mi>l</mi><mi>a</mi><mi>t</mi><mi>e</mi><mi>d</mi><mi>i</mi><mi>n</mi><mi>Q</mi><mi>u</mi><mi>e</mi><mi>s</mi><mi>t</mi><mi>i</mi><mi>o</mi><mi>n</mi><mn>1</mn><mo stretchy="false">)</mo><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex">(calculated in Question 1)<br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:1em;vertical-align:-0.25em;"></span><span class="mopen">(</span><span class="mord mathnormal">c</span><span class="mord mathnormal">a</span><span class="mord mathnormal" style="margin-right:0.01968em;">l</span><span class="mord mathnormal">c</span><span class="mord mathnormal">u</span><span class="mord mathnormal" style="margin-right:0.01968em;">l</span><span class="mord mathnormal">a</span><span class="mord mathnormal">t</span><span class="mord mathnormal">e</span><span class="mord mathnormal">d</span><span class="mord mathnormal">in</span><span class="mord mathnormal">Q</span><span class="mord mathnormal">u</span><span class="mord mathnormal">es</span><span class="mord mathnormal">t</span><span class="mord mathnormal">i</span><span class="mord mathnormal">o</span><span class="mord mathnormal">n</span><span class="mord">1</span><span class="mclose">)</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{PAT}_{\\text{Year 3}} = 3,50,000 \\times (1 - 0.30) = 2,45,000<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mo><</mo><mi>b</mi><mi>r</mi><mo>></mo><mo>∗</mo></mrow><annotation encoding="application/x-tex"><br> *</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="base"><span class="strut" style="height:0.5782em;vertical-align:-0.0391em;"></span><span class="mrel"><</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7335em;vertical-align:-0.0391em;"></span><span class="mord mathnormal">b</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">></span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.4653em;"></span><span class="mord">∗</span></span></span></span></span>\\text{CFAT}_{\\text{Year 3}} = 2,45,000 + 90,000 = 3,35,000` 1,60,000` 1,91,500` 3,35,000$ respectively.
Hence, **Option C** is the correct answer.
More Questions from Financial Management
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