) Sitara Chemicals is an Investment Center in Sitara Group of Industries. It has following data for last year (2020)

Profit: $200,000

Invested Capital: $1,000,000

Total Assets: $1,250,000

Current Liabilities: $250,000

Sales Revenue: $5,000,000

Imputed Interest Rate/WACC: 15

Calculate the following for Sitara Chemicals:

a) ROI

b) Residual Income

c) Sales Margin

d) Capital Turnover

4) Sitara is planning on its production budget to make Caustic Potash. For every kilogram of the chemical, it needs 0.5 kilogram of Potassium. The wastage is expected to be at 20%. To manufacture 1 kilogram of caustic potash, 1 hour of labor is also estimated. Typical non-productive time at Sitara is 10% with an hourly rate of Rs.90. The budgeted quantities for four quarters of 2021 are

Q1 Q2 Q3 Q4

18,000 18,750 20,500 21,000

a) How much raw potassium is required per kg of caustic potash?

b) How much total raw potassium is required in Q2 for making caustic potash?

c) How much labor time is required per kg of caustic potash?

d) Based on your answer above, the estimated per kilogram of caustic potash incurs how much total labor cost?

e) How much is the total labor cost in Q4?