Calculate profit using ROCE formula

Steps:

• Capital employed = equity shares + debentures = $1,000,000 +$200,000 = $1,200,000.
• ROCE = profit before interest and tax (PBIT) / capital employed, so PBIT = 5% × $1,200,000 =$60,000.
• Profit before tax = PBIT - finance costs = $60,000 -$20,000 = $40,000.
• Profit for the year (after tax) = profit before tax - taxation = $40,000 -$10,000 = $30,000.

Why B is correct:

• ROCE uses PBIT divided by total capital employed (equity + debt), and profit for the year is net profit after deducting interest and tax.

Why the others are wrong:

• A: Equals finance costs only, ignores ROCE calculation.
• C: Equals PBIT before deductions, not final profit.
• D: Equals profit before tax, omits taxation.

Final answer: B