when contribution is negative, then how to calculate PV ratio?

Answers were Sorted based on User's Feedback



when contribution is negative, then how to calculate PV ratio? ..

Answer / gulzar singh

lets understand with this exemple

Sales = 10, Variable cost= 3, Fixed cost = 3,

Sales = 10
less Variabled cost = 3
C0ntribution (10-3) = 7
less fixed cost = 3
profit = 4

Contriburion only negetive when Variable cost is more then
sales.

Is This Answer Correct ?    10 Yes 3 No

when contribution is negative, then how to calculate PV ratio? ..

Answer / sunil kumar

For ex .sales 8 variable 3fixed cost 2

Contribution : sales -variable cost 
                         8 - 3
                      c; 5
P :sales-fc+vc
P=8-3+2
P= 3 
Then pv% 
Pv%= fc +p÷s¤100
Pv%= 2+3÷8¤100
Pv%= 62.5

Is This Answer Correct ?    1 Yes 1 No

Post New Answer

More CompanyAffairs CS Interview Questions

Recently while appraising a loan proposal I noticed that the company was a newly formed company. While allotting the capital among the share holders the shares were allotted at a huge premium. What is the reason for showing a huge premium?

3 Answers  


what is rate of service tax and form no. of service tax ? wt rules of service tax a particuler once .?

0 Answers   iGate,


What you mean by blue chip companies?

3 Answers   Hindalco, ICSI,


I am working in a company as a finance officer during the measurement of fixed asset i have faced for land depreciation. How to measure land depreciation? please help me in this regard.

3 Answers  


can company can follow single entry system

5 Answers   SSI Small Scale Industries, Triveni,






WHAT DO U MEAN BY DIVIDENDS. WHAT IS THE TYPE OF DIVIDEND AND IS THIS PROFIT OR INTREST?

10 Answers   Bank Of America,


please tell me about Advance Bank Gurantee & Performance Bank Gurantee

3 Answers   TATA,


Income Tax Department sends cheque for INR 2 Crore as Refund after completion of Assessment for A.Y.2011 - 2012 to a Company. As per IT Return filed for this year I.T. due to Government was INR 60 Lac but was assessed at INR 70 Lac. TDS due to Company was INR 3 Crore which was admitted as INR 2.7 Crore by Government. Government also adjusts Tax dues for A.Y. 2009 - 2010 of INR 40 Lac which was disputed earlier by the Company and Appeal was lying with the CIT. Government pays Interest to the Company amounting to INR 40 Lac. Provision for Income Tax made by the Company in its accounts for F.Y. 2010 - 2011 (A.Y. 2011 - 2012) was INR 50 Lac. What would be the Journal Entry at the time of receipt of Refund of INR 2 Crore from the Government in A.Y. 2014 - 2015 in the books of the Company?

0 Answers  


what is equity capital. what is authorised capital. What is debentures. what is paid-up capital.

3 Answers   DELL,


what is meant by TDS

2 Answers  


what is nse freefloat capitalization

8 Answers   Capital IQ,


Treatment of Government grant and its utilization in P

0 Answers   Rajan Group,


Categories