When the sales increase from Rs 40,000 to Rs 60,000 and profit increases by Rs 5,000, the P/V ratio is —

A. 0.2

B. 0.3

C. 0.25

D. 40%

Answer: Option C

Solution(By Examveda Team)

Increase in sales = Rs. 60000 - Rs. 40000 = Rs. 20000
PV Ratio = Increase in Profit / Increase in sales
= 5000 / 20000 = 0.25