A person spends Rs 100,000/- to open a grocery shop and make a net profit of Rs 20,000/- in one year. The annual Return on Investment (ROI) will be:
Answer & explanation
Correct answer: option 1
Return on investment equals the net income from a business or a project divided by the total money invested in the venture multiplied by 100.
ROI = Net Profit x 100/Total Capital Invested
ROI= (20,000/100,000) x 100 = 20 percent.
ROI = Net Profit x 100/Total Capital Invested
ROI= (20,000/100,000) x 100 = 20 percent.