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ladyduck
Aug 7, 2010, 11:36 AM
Cindy invested $200,000 into a business that earned a profit of $2,700 during the past month. Cindy believes the business will earn an annual profit equal to 12 times the monthly profit. Assume Cindy wants to take $25,000 from the business each year for her personal use.

See table:
Resources created from sales: $19,000
Resources consumed:

Materials: $8,000
Insurance: $2,000
Rent: $1,500
Utilities: $1,300
Wages: $3,500
Total cost of resources consumed: $16,300
Profit earned: $2,700

a. Determine the company's annual profit.
b.Determine Cindy's return of investment.

ArcSine
Aug 8, 2010, 10:44 AM
Cindy's ROI is just a comparison--in ratio form--of her annual withdrawals and her initial investment.

But note carefully: One tiny li'l letter can make all the difference. You've typed the question as "return oF investment" which is a different animal than "return oN investment"; the latter is usually what's intended by "ROI".

Check to ascertain which one the question's asking for.