If there are Fixed assets of Rs.10,00,00 Current assets of Rs.6,00,000, Current liabilities of Rs.3,00,000 and Net profit before Interest and Tax of Rs.2,60,000; then Return on Investment will be:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 20%
Return on Investment (Return on Capital Employed) compares the profit before interest and tax with the capital employed. Capital employed can be taken as non-current (fixed) assets plus working capital.
Working capital = Current assets − Current liabilities = Rs. 6,00,000 − Rs. 3,00,000 = Rs. 3,00,000
Capital employed = Fixed assets + Working capital = Rs. 10,00,000 + Rs. 3,00,000 = Rs. 13,00,000
Return on Investment = Rs. 2,60,000 / Rs. 13,00,000 × 100 = 20%
Note: It seems that there is a mistake in the original NTA paper, which prints the fixed assets as Rs.10,00,00 when it should read Rs.10,00,000. Read as Rs. 1,00,000, the capital employed would be Rs. 4,00,000 and the return 65%, which is not among the options; with Rs. 10,00,000 the return is 20%, which is Option (3).
NCERT (2026-27 edition):
|
