Question

Calculate the amount of Profit after Tax if:
• Revenue from Operations: 4,00,000
• Cost of Revenue from Operations: \(20\%\) of Revenue from Operations
• Tax rate: \(50\%\)

• A. 80000
• B. 320000
• C. 160000
• D. 200000

Answer 1

The Correct Option is C

Cost of Revenue from Operations is calculated as: \[ \text{Cost of Revenue from Operations} = 20\% \times 4,00,000 = 0.2 \times 4,00,000 = 80,000 \] Profit before Tax is: \[ \text{Profit before Tax} = \text{Revenue from Operations} - \text{Cost of Revenue from Operations} \] \[ = 4,00,000 - 80,000 = 3,20,000 \] The Tax Amount is: \[ \text{Tax} = 50\% \times \text{Profit before Tax} = 0.5 \times 3,20,000 = 1,60,000 \] Profit after Tax is: \[ \text{Profit after Tax} = \text{Profit before Tax} - \text{Tax} = 3,20,000 - 1,60,000 = 1,60,000 \] Therefore, the Profit after Tax amounts to 1,60,000.