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3 Krishna Electronics Pvt. Ltd. is a new venture that manufactures electronic components. The company produced the following income statement results in its first year

3

Krishna Electronics Pvt. Ltd. is a new venture that manufactures electronic components. The company produced the following income statement results in its first year of operations:

Net Sales

Rs. 10,00,000

Cost of Goods Sold

- Rs. 6,50,000

Gross Profit

Rs. 3,50,000

General and Administrative Expenses

- Rs. 2,40,000

Marketing Expenses

- Rs. 80,000

Depreciation

- Rs. 45,000

EBIT

- Rs. 15,000

Interest Expenses

- Rs. 35,000

Earnings Before Taxes

- Rs. 50,000

Taxes

Rs. 0

Net Earnings (Loss)

- Rs. 50,000

Cost of Goods Sold are expected to vary with sales and are expected to be a constant percentage of sales. The General and Administrative expenses are expected to be a fixed cost. Further Marketing Expenses are also expected to remain fixed because the sales staff are on fixed salaries and no new hiring is planned. The selling price for the electronic component (manufactured by the company) is Rs. 20 per unit. The effective tax rate is expected to be 30% (when the firm is profitable.)

  1. Calculate the survival (i.e. EBDAT) breakeven point for Krishna Electronics in terms of survival revenues (Rs.)
  2. Calculate the EBDAT breakeven point in terms of number of units sold.
  3. Calculate the NOPAT breakeven point for Krishna Electronics in terms of revenues (in Rupees.)
  4. Calculate the NOPAT breakeven point in terms of number of units sold.

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