On the basis of the following information, answer the question.

Return on Investment will be:

22.5%

Return on Investment = Profit before Interest and Tax/Capital Employed x 100
                                   = 720000/3200000 x 100
                                   = 22.5%

Profit before interest and tax = Profit after tax + Tax + Interest on debentures
                                              = 450000 + 150000 + 120000
                                              = 720000

Capital employed = Long term debts + shareholders funds
                            = Equity Share Cap + Preference Share Cap + Reserves & surplus+ debentures
                            = 1200000 + 300000 + 500000 + 1200000
                            = 3200000