Q3: Prepare financial (dis)advantage of closing the plant down for the first two years- it would be closed down and the following years. (show all computations for financial (dis)advantage analysis to receive credit)

Financial (dis)advantage analysis It can be observed that the loss shown in financial statement is not actual loss but there are many expenses due to which the loss has been exaggerated. There are expenses like administrative expenses, half of corporate expenses, salary of the plant manager, rent expenses, etc. which will be still incurred when plant is closed and therefore if we exclude these expenses while computing real profit as above, we get that plant is actual beneficial for the company.

Q3:

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