From the following details, calculate net profit before tax:
Net Profit after tax is ₹50,000
15% Long-term debt ₹12,00,000
Tax rate 20%
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹62,500.
Net Profit after tax is ₹50,000
15% Long-term debt ₹12,00,000
Tax rate 20%
Profit before tax = 50,000 x 100/80
= ₹10,00,000
= 62,500