Assertion (A): Return on investment explains the overall utilization of funds by a business enterprise. Reason (R): It measures return (Net Profit before Interest and Tax) on total funds (Capital employed). In the context of these statements, choose the correct option.

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KollegeApply · Accepted Answer

Both (A) and (R) are true and (R) is correct explanation of (A). Explanation: Return on Investment (ROI) shows how efficiently a company uses the total funds to generate profit. It is computed as Net Profit before Interest and Tax (PBIT) $\div$ Capital Employed, which evaluates the return on total funds invested. As a result, both Assertion and Reason are true, and Reason correctly explains Assertion.

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