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Business Data Management · End Term · 13 Sept 2026 · May 2026 term · Set S2

Question 33: Case Study: Nova Consumer Products Ltd. Company Backgrou…

Question 33

+1 markOne correct option

Case Study: Nova Consumer Products Ltd. Company Background Nova Consumer Products Ltd. manufactures packaged food and household products. During FY 2026, the company expanded its distribution network and invested in additional manufacturing capacity. The following simplified financial information is available for the year. All figures are in ₹ lakh unless otherwise stated. Statement of Profit and Loss - FY 2026

Simplified Balance Sheet - FY 2026

Additional Information • Current Market Price per Share = ₹120 • Earnings Per Share (EPS) = ₹6 • Dividend per Share = ₹1.80 • For this case study, Interest Coverage Ratio = EBITDA ÷ Interest Expense. • Assume year-end balances may be used where average balances are not provided.
Based on the above data, answer the given subquestions.

If Nova purchases additional machinery worth ₹2,000 lakh entirely on long-term credit, what is the immediate effect on the accounting equation?

  1. A

    Assets increase and Equity decreases

  2. B

    Assets decrease and Liabilities increase

  3. C

    Assets and Liabilities both increase by ₹2,000 lakh

  4. D

    Liabilities increase and Equity increases

Show answer

Correct answer

  • C

    Assets and Liabilities both increase by ₹2,000 lakh

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Question 33 of 43 in the IIT Madras BS Business Data Management (BDM) End Term paper sat on 13 Sept 2026, in the May 2026 term (Business Data Management 13 Sep 26 (Session 2)). It carries 1 mark.

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