Question

If total capital invested by company is ₹5,00,000 and net profit before interest, tax & dividend is ₹1,60,000, what is ROI?
$\frac{1,60,000}{5,00,000}\times 100 = 32 \%$

Answer 1

$\dfrac{1,60,000}{5,00,000}\times 100 = 32 \%$

Answer 2

Answer:

ROI = 32 %

Explanation:

total capital invested by company  = Rs 500000

Net Profit Before interest, tax & dividend is = Rs 160000

ROI - Return over investment

ROI = 100 * (Net Profit Before interest, tax & dividend) / total capital invested

=> ROI = 100 * 160000 / 500000

=> ROI = 100 * 16 / 50

=> ROI = 2 * 16

=> ROI = 32 %