Read the following information and answer the question.

Company XYZ Ltd.
TOTAL FUND USED = 50 LAKHS

Calculate the earning after tax in situation II.

₹2,80,000

The correct answer is option 1- ₹2,80,000.

Debt = 15 lakhs
Interest = 10%
Interest amount = 15,00,000 x 10/100
                         = 1,50,000

         EBIT = 5,00,000 
less: Interest = 1,50,000
         EBT = 3,50,000 (Earnings before taxes)
less: Tax = 70,000 (3,50,000 x 20/100)
         EAT 2,80,000

Thus, EAT for situation II is 2,80,000.