The correct answer is C. 18%.
The profit-to-volume ratio (P/V ratio) is a measure of a company’s profitability. It is calculated by dividing the company’s profit by its sales. A higher P/V ratio indicates that the company is more profitable.
To calculate the P/V ratio for 2017, we divide the company’s profit of Rs. 5,000 by its sales of Rs. 50,000. This gives us a P/V ratio of 10%.
To calculate the P/V ratio for 2018, we divide the company’s profit of Rs. 10,000 by its sales of Rs. 75,000. This gives us a P/V ratio of 13.33%.
The P/V ratio has increased from 10% in 2017 to 13.33% in 2018. This indicates that the company is becoming more profitable.
The following are the options for the question:
A. 15%
B. 20%
C. 18%
D. 16%
Option A is incorrect. The P/V ratio for 2017 is 10%, not 15%.
Option B is incorrect. The P/V ratio for 2018 is 13.33%, not 20%.
Option C is correct. The P/V ratio for 2018 is 13.33%.
Option D is incorrect. The P/V ratio for 2017 is 10%, not 16%.