Profit after tax and interest is ₹1,60,000.

Tax rate is 20%.

10% long term borrowing is ₹20,00,000.

Find profit before tax and after interest.

₹2,00,000

The correct answer is option 3- ₹2,00,000.

Profit after tax and interest = ₹1,60,000.
Tax rate = 20%
Profit before tax = Profit after tax and interest x [100/(100-Tax rate)]
                        = 1,60,000 x 100/80
                        = 2,00,000

Profit before tax and after interest = Profit before tax 
                                                       = 2,00,000