If B spends Rs. 2,00,000 to open a shop and earns a net profit of Rs. 40,000 in one year, calculate the annual return on investment
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Explanation:Annual return on investment = (Net profit / Total investment) x 100
Given that B spent Rs. 2,00,000 to open a shop and earned a net profit of Rs. 40,000 in one year, we can calculate the annual return on investment as
Annual return on investment = (Net profit / Total investment) x 100
= (40000 / 200000) x 100
= 20%
Therefore, the annual return on investment for B is 20%. This means that B earned 20% of the total investment amount as profit in one year.
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