Question : A company has earned Rs 5,00,000 as profit before interest and tax. Its ROI is 20%. Calculate return on investment.
Option 1: Shareholder fund
Option 2: Market price of share
Option 3: Capital employed
Option 4: None of the above

Question

Question : A company has earned Rs 5,00,000 as profit before interest and tax. Its ROI is 20%. Calculate return on investment.

Option 1: Shareholder fund

Option 2: Market price of share

Option 3: Capital employed

Option 4: None of the above

Team Careers360 · Accepted Answer

Correct Answer: Capital employed

Solution : Answer = Capital employed

Return on capital employed=$\frac{ ext{N.P before interest on taxes}}{ ext{Capital employed}} imes 100$

⇒ Capital employed= $\frac{5,00,000}{20} imes 100$= Rs 25,00,000.
Hence, the correct option is 3.

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Question : A company has earned Rs 5,00,000 as profit before interest and tax. Its ROI is 20%. Calculate return on investment.Option 1: Shareholder fundOption 2: Market price of shareOption 3: Capital employedOption 4: None of the above

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Question : A company has earned Rs 5,00,000 as profit before interest and tax. Its ROI is 20%. Calculate return on investment.
Option 1: Shareholder fund
Option 2: Market price of share
Option 3: Capital employed
Option 4: None of the above

Question : With the help of the following information, calculate the Return on Investment:
Net Profit after Interest and Tax Rs. 6,00,000; 10% Debentures Rs. 10,00,000; Tax @ 40%; Capital Employed Rs. 80,00,000.

Question : With the help of the following information, calculate the Return on Investment:
Net Profit after Interest and Tax Rs. 6,00,000; 10% Debentures Rs. 10,00,000; Tax @ 40%; Capital Employed Rs. 80,00,000.