Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Financial Management

Question:

Radha Ltd has invested ₹100,000 in the business. Out of which ₹ 70,000 is equity and ₹ 30,000 is debt. Net Profit after tax is 24,000. Tax rate is 20%. Calculate ROI.

Options:

20%

25%

30%

40%

Correct Answer:

30%

Explanation:

Profit before tax= (24,000+6,000) i.e 30,000 (Tax rate is 20% so tax =6000)

ROI= EBIT /Total Investment × 100

ROI=30,000/100,000*100=30%