Question

Net profit before interest and tax
- Rs. 165,000
Current Assets-Rs. 400,000
Current liabilities-Rs. 2,00,000
fixed Assets Rs.-6.00,000
Calculate Return on Investment​

Answer 1

Answer:

the answer is 20.625%

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Answer 2

Return on Investment = 20.625%

Explanation:

Given:

Net profit before interest and tax  = 165,000

Current Assets = 400,000

Current liabilities = 2,00,000

Fixed Assets = 6,00,000

Return on Investment = ?

Computation of Capital Employed:

Capital Employed = Fixed Assets + Current Assets - Current liabilities

Capital Employed = 6,00,000 + 4,00,000 - 2,00,000

Capital Employed = 8,00,000

Computation of Return on Investment :

Return on Investment = Net profit before interest and tax / Capital Employed

Return on Investment = 165,000 / 8,00,000

Return on Investment = 0.20625

Return on Investment = 20.625%

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