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WAEC Commerce 2013 Question 4

Question 4

Business Calculations

The PW Company Ltd. achieved the following result in 2012: Sales Le 100,000; Profit Le 5,000; Capital employed Le 20,000. The return on capital employed is

  1. A.25%.
  2. B.20%.
  3. C.15%.
  4. D.5%.
Show the answer and explanation

Answer: A (25%.)

Explanation

Return on capital employed = profit ÷ capital employed × 100 = 5,000 ÷ 20,000 × 100 = 25%.