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Q: Study the table below to answer these questions. Rate of Interest, Dividend Payout Ratio and the Retained Earnings of Five Companies Profit earned is either paid out as dividend or ploughed back in business as retained earnings. Interest is paid on borrowings. 1. By how much do the borrowings of Company B exceed that of Company A ? 1. Rs. 1,210,000      2. Rs.1,320,000      3. Rs.1,000,000      4. Rs.1,100,000 2. By how much does the dividend paid by Company D exceed the dividend paid by Company B ? 1. Rs.23 lakh          2. Rs.32 lakh           3. Rs.320 lakh         4. Rs.230 lakh 3. The profit of E is more/less than that of C by _____ % 1. 33.3% less          2. 33.3% more        3. 25% less            4. 25% more 4. What is the sum of profits made by Companies A and B ? 1. Rs.500 lakh       2. Rs.600 lakh       3. Rs.700 lakh       4. Rs.800 lakh 5. What is the sum of the borrowings of all five companies ? 1. Rs.146 lakh      2. Rs.14.6 lakh      3. Rs.14.6 crore      4. None of these

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1. Answer : 4 Explanation : Let the borrowing of Company A = x Interest of Company A = 234000 Rate of Interest = 18%  ∴x×18100=234000     ⇒x=1300000   Let the borrowing of Company B = y  Interest of Company B = 576000 Rate of interest = 24% ∴y×24100=576000     ⇒y=2400000   Required difference = y - x = 2400000 - 1300000 = Rs. 1100000      2. Answer : 2  Explanation :   Let the profit of Comapny B = 100%  Dividend Payout ratio(%) of B = 19.60  Remaining percent i.e retained earning = 100 - 19.60 = 80.4%  According to question, 80.4% = Rs.402 lakh  100% = Rs.500 lakh  Therefore,  Total dividend paid by Company B = 500 - 402 = Rs. 98 lakh    Let the profit of company D = 100%  Dividend payout ratio (%) of D = 32.50   Remaining percent i.e retained earning = 100 - 32.50 = 67.5%   According to question, 67.5% = Rs. 270 lakh   100% = Rs. 400 lakh  Therefore, Total dividend paid by company D = 400 - 270 = Rs. 130 lakh   Required difference = 130 - 98 = Rs. 32 lakh      3. Answer : 3 Explanation :  Let the profit of Company C = 100%  Dividend payout ratio of C = 8.75%  Remaining percent i.e, retained earning = 100 - 8.75 = 91.25  According to question, 91.25% = Rs. 365 lakh  100% = Rs. 400 lakh  Therefore, Profit of C = Rs. 400 lakh   Let the profit of company E = 100%  Dividend payout ratio of E = 28%  Remaining percent i.e retained earning = 100 - 28 = 72%  According to question, 72% = Rs.216 lakh  100% = Rs.300 lakh Therefore, Profit of E = Rs. 300 lakh  Required percentage = 100400×100 = 25% less     4. Answer : 3  Explanation :   Profit made by company A = Rs. 200 lakh  Profit made by company B = Rs. 500 lakh   Required Sum = 200 + 500 = Rs. 700 lakh      5. Answer : 4  Explanation :   Required Sum = 1300000 + 2400000 + 810000 + 1600000 + 1200000 = 7310000 = Rs. 73.1 lakh

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