Read the following information carefully and answer the question.

The Balance Sheet of ABC Ltd as on 31 March 2022:

Additional information :

1. Market price of share = 34

2. Net profit after tax = 1,50,000

3. Tax = 50,000

The return on investment will be :

22.14%

The correct answer is option 4- 22.14%.

* Capital employed = Equity share capital + Preference share capital + general reserve + Debentures
                         = 4,00,000 + 1,00,000 + 1,84,000 + 4,00,000
                         = 10,84,000

Net profit after tax = 1,50,000
Tax = 50,000
Net profit before tax = 1,50,000 + 50,000
                              = 2,00,000

Interest on Debenture = 4,00,000 x 10/100
                                 = 40,000

* Net profit before interest and tax = Net profit before tax + interest on debentures
                                                = 2,00,000 + 40,000
                                                = 2,40,000

Return on Investment = Profit before Interest and Tax / Capital Employed × 100
                                = 2,40,000/ 10,84,000 x 100
                                = 22.14 %