Return On Investment and Return Of Investment John invested $250,000 into a busi
ID: 2502207 • Letter: R
Question
Return On Investment and Return Of Investment John invested $250,000 into a business that earned a profit of$2,250 during the past month as shown below. John beleives thebusiness will earn an annual profit equal to twelve times themonthly profit. Assume John wants to take $20,000 from the businesseach year for his personal use. Resources created fromsales 17,000 Resources consumed: Materials $7,500 Insurance 1,500 Rent 2,000 Utilities 950 Wages 2,800 Total cost of resourcesconsumed 14,700 Profitearned $2,250 Determin the company's return on investment. Determin John's return of investment. Return On Investment and Return Of Investment John invested $250,000 into a business that earned a profit of$2,250 during the past month as shown below. John beleives thebusiness will earn an annual profit equal to twelve times themonthly profit. Assume John wants to take $20,000 from the businesseach year for his personal use. Resources created fromsales 17,000 Resources consumed: Materials $7,500 Insurance 1,500 Rent 2,000 Utilities 950 Wages 2,800 Total cost of resourcesconsumed 14,700 Profitearned $2,250 Determin the company's return on investment. Determin John's return of investment.Explanation / Answer
Amount
2250 * 12
27,000 /250,000
20000 / 250000
DetailsAmount
Monthly Profit 2,250.00 Annual Profit2250 * 12
27000.00 Company's Return oninvestment27,000 /250,000
10.80% John's Annual Drawings 20000.00 John's Return on investment20000 / 250000
John's Return oninvestment 8.00%