PEV Nov 2009
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Terdoo
Registered Posts: 144 Dedicated contributor 🦉
Task 2.2 b
(v) how do they get return on capital investment 34.09%
Thanks in advance
(v) how do they get return on capital investment 34.09%
Thanks in advance
0
Comments

The formula is profit divided by capital times 100.
The profit given for the machines is 460,000.
The capsules are sold for 0.30 each. All costs deducted leaves a profit of 0.01 per capsule. They expect to sell 10,400,000. The profit is then 1,040,000.
Total profit is 460,000 + 1,040,000 is 1,500,000.
The capital investment is 2,400,000 for the machine and 2,000,000 for the capsules.
Total capital is 2,400,000 + 2,000,000 is 4,400,000.
1,500,000 divided by 4,400,000 times 100 is 34.10%
Does this help?0 
Re Pev Nov 2009
Thanks for the quick reply, I was struggling with that the whole day.0
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