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

Calculate the Cost of Revenue from Operations: $$\text{Cost of Revenue from Operations} = 20\% \times 4,00,000 = 0.2 \times 4,00,000 = 80,000$$  Calculate the Profit before Tax: $$\text{Profit before Tax} = \text{Revenue from Operations} - \text{Cost of Revenue from Operations}$$ $$= 4,00,000 - 80,000 = 3,20,000$$ Calculate the Tax Amount: $$\text{Tax} = 50\% \times \text{Profit before Tax} = 0.5 \times 3,20,000 = 1,60,000$$ Calculate Profit after Tax: $$\text{Profit after Tax} = \text{Profit before Tax} - \text{Tax} = 3,20,000 - 1,60,000 = 1,60,000$$ Thus, the amount of Profit after Tax is 1,60,000.