On the basis of the following information, what will be the EBIT corresponding to financial indifference point?
Total capital outlay Rs. 60,00,000
Financing Plans
1. 100% Equity @ Rs. 10/- per share
2. Debt - equity ratio 2 : 1
Rate of interest 18% p.a., corporate tax rate 40%
A. Rs. 10,00,000
B. Rs. 12,00,000
C. Rs. 10,80,000
D. Rs. 12,80,000
Answer: Option C
This Question Belongs to Commerce >> Accounting
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