Introduction: The Universal Challenge of Financial Management

Use the problems in this book as a diagnostic tool. Don’t just read the solution; cover it up. Solve the problem. Compare your steps to Kishore’s. Where you deviate, you’ve found your weakness. That targeted practice is the ultimate solution to any financial management problem. Are you preparing for a finance exam or a corporate valuation? The first step to solving a problem is admitting you have one. The second step is practicing with the best—Ravi M. Kishore.

A company manufactures a component costing ₹50 (Variable ₹30, Fixed ₹20). An outside supplier offers it for ₹45. Should the company buy?