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NI for Z b4 calculating Depreciation= 850.
After calculating for depreciation( 3lakh/3) NI = 750
Similarly Calculating NI for X after depreciation= 850-300(PRINTER EXPENSED)=550
PAT=550-25%= 412.5
Therefore, ROE= PAT/END EQ= 412.5/1000 = 4.13%
CLOSEST TO 5.4%
THE NET INCOME OF THE COMPANY Z WILL BE FOUND OUT AS GIVEN BELOW
THE PROFIT BEFORE TX OF COMPANY X WILL BE M 750000/.75=1000000
NOT THE PROFIT BEFORE TAX FOR Z WILL BE LOWER THAN THAT OF X BECAUSE Z EXPENSED THE PRINTER HENCE THE PBT OF Z IS 800000. NOW PAT OF Z WILL BE 600000
FOR EQUITY NOW IT WILL ALSO BE REDUCED BY THE NETR TAX AMOUNT OF THE AMOUNT NOT DEPRICIATED BE X THAT IS 200000X.75=150000
HENCE END OF EAR EQUITY FOR Z= 9850000
THEREFORE ROE= 600000/9850000=6.1%