To calculate the simple Return on Investment (ROI), we use the formula:
ROI = \left( \frac{\text{Net Return on Investment}}{\text{Cost of Investment}} \right) \times 100\%ROI=(Cost of InvestmentNet Return on Investment)×100%
Given that the cost of the machine is $200,000 and the expected annual savings (which can be considered as the net return) is $35,000, we can plug these values into the formula:
ROI = \left( \frac{35,000}{200,000} \right) \times 100\% = 17.5\%ROI=(200,00035,000)×100%=17.5%
Therefore, the simple ROI for this piece of equipment is 17.5%1.
Contribute your Thoughts:
Chosen Answer:
This is a voting comment (?). You can switch to a simple comment. It is better to Upvote an existing comment if you don't have anything to add.
Submit