[misskittykitty24]

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 return on investment.
b.Determine Cindy's return of investment.

[morgaine300]

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[Jordan5596]

$200,000 Investment
Resources Consumed $16,300.00
$19,000.00-$16,300.00=$2,700.00 X's 12=$32,400.00

$32,400.00 Annual Profit
$25,000.00 Withdraw each year
$7,400.00 Return of Investment 16/2%

total profit is $32,400.00 and the amount of withdrawal is $25,000.00, so the difference is the return of the owner's investment in the amount of $7,400.00 ($25,000 withdrawal and $32,400 profit) each year.