PROBLEM 10.9 Telestra Company Limited is a growing and highly profitable consumer goods firm. The firm is introducing a new breakfast cereal. The cost of plant is estimated as *250 lakh. The annual capacity of the plant is to manufacture 50,000 packets of 850 grams each. The price per set in the first year would be 140 and the variable cost per packet will be 85. The initial fixed cost would be 150 lakh which includes one-time promotion expenditure of 75 lakh in the first year. Written-down depreciation rate for tax purposes is 25 per cent. Working capital requirement in the beginning of the year is estimated to be 15 per cent of sales. The company expects its revenue and costs to be affected by