You expect that a project will bring in $25,000 USD in revenue per year. You estimate it will cost $12,000 up front. You also estimate costs of $200 per month for the first 12 months, which equals $2,400 per year. Using the formula (G-C) ÷ C = ROI, how would you calculate the project’s return on investment (ROI) after the first 12 months?

Q: You expect that a project will bring in $25,000 USD in revenue per year. You estimate it will cost $12,000 up front. You also estimate costs of $200 per month for the first 12 months, which equals $2,400 per year. Using the formula (G-C) ÷ C = ROI, how would you calculate the project’s return on investment (ROI) after the first 12 months?

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Q: You anticipate that a project will generate $25,000 USD in annual income. You estimate the upfront costs to be $12,000. Additionally, you budget $200 a month for the first twelve months, or $2,400 annually. How would you determine the project’s return on investment (ROI) after the first 12 months using the formula (G-C) ÷ C = ROI?

  • (25,000 – 14,400) ÷ 14,400 = 74%
  • (25,000 – 12,000) ÷ 14,400 = 90%
  • (25,000 – 12,000) ÷ 12,000 = 88%
  • (25,000 – 12,000) ÷ 14,400 = 108%

Explanation:The correct calculation for the project’s return on investment (ROI) after the first 12 months using the formula (G-C) ÷ C is:

ROI=(25,000−14,400)14,400

ROI=10,60014,400

ROI≈73.61%

So, the closest option is: (25,000−14,400)÷14,400=74%

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