1.

State with reason whether the following transactions will increase, decrease or not change the 'Return on Investment' Ratio:(i) Purchase of machinery worth ₹10,00,000 by issue of equity shares.(ii) Charging depreciation of ₹25,000 on machinery.(iii) Redemption of debentures by cheque ₹2,00,000.(iv) Conversion of 9% Debentures of ₹1,00,000 into equity shares.

Answer» State with reason whether the following transactions will increase, decrease or not change the 'Return on Investment' Ratio:

(i) Purchase of machinery worth ₹10,00,000 by issue of equity shares.

(ii) Charging depreciation of ₹25,000 on machinery.

(iii) Redemption of debentures by cheque ₹2,00,000.

(iv) Conversion of 9% Debentures of ₹1,00,000 into equity shares.


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