IIFT 2010 Question Paper Question 3

Question 3

A Techno company has 14 machines of equal efficiency in its factory. The annual manufacturing costs are Rs. 42,000 and establishment charges are Rs. 12,000. The annual output of the company is Rs. 70,000. The annual output and manufacturing costs are directly proportional to the no. of machines. The shareholders get 12.5% of the total profit which is equal to the total output minus the total cost. If 7.14% of machines remain closed throughout the year, then the percentage decrease in the amount of profit of the shareholders would be:

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