Radha Ltd has invested ₹1,00,000 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.

30%

The correct answer is option 3- 30%.

80% profit =  24,000
20% = 24,000/80 x 20
        = 6,000

Tax rate is 20% i.e. = 6000

Profit before tax = (24,000 + 6,000)
                           = 30,000

ROI = EBIT /Total Investment × 100

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