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Return On Investment and 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 the business will earn an annual profit equal to twelve times the monthly profit. Assume John wants to take $20,000 from the business each 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.

Apr 25 2018 View more View Less

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