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The paid out cost of a farmer is Rs. 500 and fixed cost is Rs. 250. If the gross returns from farm business is Rs. 3700, the capital turn over would be
Answer & Solution
Correct Answer:
Option
C
First, let's understand the key terms:
* Paid-out cost: This is the actual money the farmer spends. In this case, it's Rs. 500.
* Fixed cost: These are costs that don't change with the level of production. Here, it's Rs. 250.
* Gross returns: This is the total revenue the farmer gets from the farm business, which is Rs. 3700.
* Capital turnover: This ratio shows how efficiently a business uses its capital to generate revenue. It's calculated as Gross Returns / Total Cost.
Now, let's calculate the total cost:
Total Cost = Paid-out Cost + Fixed Cost = Rs. 500 + Rs. 250 = Rs. 750
Next, calculate the capital turnover:
Capital Turnover = Gross Returns / Total Cost = Rs. 3700 / Rs. 750 = 4.93
Therefore, the capital turnover is 4.93.
So, the correct answer is: Option C: 4.93
* Paid-out cost: This is the actual money the farmer spends. In this case, it's Rs. 500.
* Fixed cost: These are costs that don't change with the level of production. Here, it's Rs. 250.
* Gross returns: This is the total revenue the farmer gets from the farm business, which is Rs. 3700.
* Capital turnover: This ratio shows how efficiently a business uses its capital to generate revenue. It's calculated as Gross Returns / Total Cost.
Now, let's calculate the total cost:
Total Cost = Paid-out Cost + Fixed Cost = Rs. 500 + Rs. 250 = Rs. 750
Next, calculate the capital turnover:
Capital Turnover = Gross Returns / Total Cost = Rs. 3700 / Rs. 750 = 4.93
Therefore, the capital turnover is 4.93.
So, the correct answer is: Option C: 4.93
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Login=> 3700/750 = 4.9333 (Ans)