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Question
If Debt-Equity Ratio is 1.8 : 1, what will be the effect of the following:
| (i) | Sale of Fixed Asset (Book value ₹ 2,00,000) at a loss of ₹ 10,00,000 | (a) | Increase |
| (ii) | Redemption of Debentures for cash | (b) | Decrease |
| (iii) | Purchase of a fixed asset by taking a long-term loan | (c) | No change |
Choose the Correct Option:
Options
(i) - (b), (ii) - (a), (iii) - (c)
(i) - (a), (ii) - (c), (iii) - (b)
(i) - (a), (ii) - (c), (iii) - (a)
(i) - (b), (ii) - (b), (iii) - (a)
MCQ
Match the Columns
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Solution
(i) - (a), (ii) - (c), (iii) - (a)
Explanation:
| (i) | Sale of Fixed Asset (Book value ₹ 2,00,000) at a loss of ₹ 10,00,000 | (a) | Increase |
| (ii) | Redemption of Debentures for cash | (c) | No change |
| (iii) | Purchase of a fixed asset by taking a long-term loan | (a) | Increase |
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