A company has ₹10,00,000 Capital Employed and 10% Debentures of ₹5,00,000.
Profit after tax is ₹2,50,000 whereas tax was ₹50,000.

What will be the Return on Investment?

35%

The correct answer is option 2- 35%.

R.O.I = Net profit before interest and tax/ Capital Employed *100
         = 3,50,000/10,00,000  x 100
         = 35%

Net profit before interest and tax = Profit after tax + tax + interest
                                                     = 2,50,000 + 50,000 + 50,000 (10% of 5,00,000)
                                                     = 3,50,000