In 1997-98 the total cost of raw materials is estimated as 50% of sales of that year. The turn over of Gross fixed assets, defined as the ratio of sales to Gross fixed assets, in 1997-98 is, approximately
Explanation:
Total cost of raw material = 0.5 × Sales
∵ Import of raw material = 20.2 × Total cost of raw material
∴ Import of raw material = 10.1 × Sales
∵ Import of Capital Goods = 17.6 × Gross fixed assets (GFA)
∵ Imports = Raw Materials + Capital Goods
∴ Imports = (10.1 × Sales) + (17.6 × GFA)
∵ Imports = 14.2 × Sales
∴ 14.2 × Sales = (10.1 × Sales) + (17.6 × GFA)
∴SalesGFA=17.64.1=4.3
Hence, option (b).
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