Query:

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How to calculate Average investment when only fixed cost is given?

Please explain reason if it is calculated on sales?

 

Reply:

It is calculated on sales if only Fixed cost is given. If FC and VC given then calculated on total cost.

Reason is if only FC is given, then debtors figure is not estimated properly because there ought to be other costs, variable etc.

 

 

(Inputs from Prof. Richa Jain)

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