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Question

Calculate operating profit:
operating revenue = Rs. 10,000,000; COGS = Rs. 4,000,000; general and administrative expenses = Rs. 3,000,000; interest expense= Rs. 4,000,000; and income taxes = 900,000.

A
Rs. 2,500,000
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B
Rs. 4,000,000
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C
Rs. 2,000,000
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D
Rs. 3,000,000
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Solution

The correct option is D Rs. 3,000,000
Operating profit = Operating revenue - COGS - General and administration expenses
= Rs. 10,000,000 - Rs. 4,000,000 - Rs. 3,000,000
= Rs. 3,000,000.

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