n NISM Certifications
XV NISM Series XV
Medium

A business has 50,000 outstanding shares with an Earnings Per Share (EPS) of Rs. 4. The EBIT of the business is 40% of sales and is 200% of net profit. Calculate the total sales of the business.

Practice question from NISM XV Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Rs. 8,00,000

  2. B

    Rs. 12,80,000

  3. Rs. 10,00,000

    Correct answer

  4. D

    Rs. 7,80,000

Why this is the answer

Net profit = 2,00,000, EBIT = 4,00,000, Sales = 4,00,000 ÷ 0.40 = 10,00,000.

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