Question

0.117. Following particulars are obtained from the books of Assam Tea Ltd, as at
31st March, 2018:
Equity Share Capital
10% Preference Share Capital
Reserve and Surplus
15% Long term Loans
Current Liabilities
2,30,000
2,00,000
1,70,000
80,000
3,60,000
Net Profit after Interest and Tax = 1,80,000.
Tax Rate = 40%
Calculate Return on Investment.
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Answer 1

Answer:

EBIT =(180000÷60%)+(80000×15%)=312000

investment=680000

ROI=312000÷680000×100=45.88%

Answer 2

Explanation:

calculation of net profit before tax