Based on following data related to Ambe limited, Jaipur, Answer question.

Determine Return on Investment.

120%

The correct answer is Option 4 - 120%.

Return on Investment = Profit before Interest and Tax/ Capital Employed × 100
                                = 300000/250000 x 100
                                = 120%

Profit after tax = 174000
Tax rate = 40%
Profit before tax = 174000 x 100/60
                        = 290000

Interest on debentures = 100000 x 10/100
                                 = 10000

Profit before interest and tax = 290000 + 10000
                                          = 300000

Capital employed = Equity Share Capital + Preference Share Capital + Debentures
                          = 100000 + 50000 +100000
                          = 250000