Question

Solve the following:
If total capital invested by company is Rs 5,00,000 and net profit before interest, tax and dividend is Rs 1,60,000, what is ROI?

Answer 1

Net Profit before Interest, Tax and Dividend = Rs. 160,000 (Given)
Total Capital Invested (Net Capital Employed) = Rs. 50,000(Given)
Return on Investment (ROI) = 
`"Net Profit before Interest, Tax and Dividend"/"Total Capital Invested (Net Capital Employed)"` x 100

= `[160,000]/[500,000] xx 100`

= 32 %