XYZ Ltd. is engaged in manufacturing of an electronic component, to be used by industries producing electronic gadgets for domestic use. The company…

XYZ Ltd. is engaged in manufacturing of an electronic component, to be used by industries producing electronic gadgets for domestic use. The company is a leveraged company, currently paying annual interest of 33 lakhs on its 11% debt. The company is financially prudent. It has a balance of 50 lakhs as retained earnings. The company maintains Long-term Debt to Equity ratio of 2: 1. The face value per share of the company is 10. Due to operating in a competitive market, the marketing manager of the company has submitted a report exhibiting significant potential for sales growth. The production manager has endorsed the idea and has suggested adopting latest technology at the workplace. In case the company implements new technology, the production efficiency will increase which will bring down the overall cost of production. To procure and install this new technology, the company requires an additional fund of 3 crores. This additional fund will be arranged in such a manner that it will not impact the present Long-term Debt to Equity ratio. The additional debt will carry interest rate of 12% p.a. As a result of implementing the new technology, it is anticipated that ROI will increase by 3% from present ROI of 15%. Applicable tax rate is 30%. Based on the facts mentioned above pertaining to XYZ Ltd., you are required to answer the following questions 1 to 5: