MTH302 Current Midterm Paper Dec Fall 2013 File 3

An article costing Rs.500 is sold at 10% loss. Find its selling price. 2 marks

Cost = 500

Loss rate = 10%

Selling price = cost (1- loss rate)

Selling price = 500 (1-.10)

Selling price = 500 (.90)

Selling price =  450

What is the formula for contribution rate? 2 marks

Contribution rate =  (contribution margin / net sales ) *100

A shoe store uses a 40% markup on cost. Find the cost of a pair of shoes that sells for $63?          3 marks

Selling price = 63

Muc = 40%

Selling price = cost price * (1+muc)

63 = cost price (1+.40)

63 = cost price1.40

Cost price = 63/1.40

Cost price =  45

 Find NPV of given data.   3 MARKS

20	RATE
-260000	INTIAL INVESTMENT
40000	CASH FLOW IN FIRST YEAR
45000	CASH FLOW IN SECIND YEAR
50000	CASH FLOW IN THIRD YEAR

Evaluate the sum of the years digits depreciation of an asset having the cost of Rs.10,000  for a period of 5 years such that salvage value after 7 years is Rs.5000.    5 marks

Solution

Cost Price                                            Rs.10, 000

Salvage value after 7 years                 Rs.5, 000

Depreciable Value                               =Cost Price – Salvage value

                                                            =10,000-5,000

                                                            =5,000

Sum of Years digit depreciation.        =7+6+5+4+3+2+1

                                                            =28

1st  year depreciation                           =7/28*5000     =Rs.1, 250

2nd year depreciation                           =6/28*5000     =Rs.1, 071

3rd year depreciation                          =5/28*5000     =Rs.893

4th year depreciation                            =4/28*5000     =Rs.714

5th year depreciation                            =3/28*5000     =Rs.536