Team I: Work on it for Better Understanding

1) You are required to calculate the DFL and Finance financial break-even
point and its significance from the following information:

PBDIT INR 825.26 cr.

Depreciation INR 5.96 cr.
Effective tax rate 30%
EPS INR 3.647
Book value INR 28.74 per share
Number of outstanding shares INR 33.146 cr.

2) X Ltd., achieves a sales of INR 20 lakh for the year ended 2018-19. The
variable cost ratio is 70% and fixed cost is INR 5 lakh. The company’s
capital structure consists of 25,000 equity shares, 2000 15% preference
shares of face value INR 100. If the corporate tax rate is 40%, the financial
break-even point for X Ltd., is

3) Hyderabad Chemicals has never issued any preference share since its
incorporation. Its contribution margin is 20 percent against a selling price
of INR 500 per unit. The fixed expenses for its operations are INR 90,000
and the interest on term loan is INR 75,000. What is its overall break-even
point?

4) For Phonetic Ltd., the selling price of the sandals is INR 40 and
contribution to sales ratio is 25 percent. Its income statement reveals its
fixed costs as INR 80 lakh, interest payment as INR 30 lakh and preference
dividend payment as INR 12 lakh. If the applicable tax rate is 40 percent,
what is the output level at its overall break-even point?

5) If DFL of a firm is 1.61, EBIT is INR 25,000 and the interest component is
INR 7,000, the dividend on preference shares that the firm paid assuming a
tax rate of 30%.