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Current Asset 20,000.00 Current Liabilities 12,000.00 Non Current Assets 10,000.00 Long Term Debt 5,000.00 Equity 13,000.00 Situation A: If 2,000 of NCA is shifted to

Current Asset

20,000.00

Current Liabilities

12,000.00

Non Current Assets

10,000.00

Long Term Debt

5,000.00

Equity

13,000.00

Situation A: If 2,000 of NCA is shifted to CA thereby increasing it to 22,000 and assuming further that CA generate 15% profit while NCA generate 25% profit, the effect of this is:

Situation B: If 1,000 LTD is transferred to CL thereby increasing it to 13,000 and assuming further that the firm pays 20% interest for short-term debts and 30% interest for LTD, the effect of this is;

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