Share
Explore BrainMass

Company's return on investment

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.

Solution Preview

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 ...

Solution Summary

Response provides the steps to compute the company's return on investment

$2.19