166 :- Net Profit before Interest and Tax Rs 4,00,000; 15% Long term Debt Rs 8,00,000; Shareholder’s Funds Rs 4,00,000. Calculate Return on Investment.
Solution :-
Net Profit before Interest and Tax = Rs 4,00,000
Capital Employed = 15% Long Term Debts + Shareholder’s Funds
= 8,00,000 + 4,00,000
= Rs 12,00,000
Return on Investment = (Net Profit before Interest, Tax and Dividend/Capital Employed) x 100
= (4,00,000/12,00,000) x 100
= 33.33%