Question

crane corporation has collected the following data concerning one of its products: unit selling price $140 total sales 19950 units total unit cost $120 total assets investment $1995000 what is the return on investment (roi) percentage for crane corporation for its product? 14.3%

Answer 1

The crane corporation's return on investment (ROI) for its product is 16.67%.

Return on investment, also known as ROI, is a mathematical formula that investors can use to analyse their investments and estimate how well one investment has fared in comparison to others. Investors can use ROI to calculate their overall returns on their assets. When developing a business case for a particular proposition, it is common practice to combine several different methodologies, including a computation of return on investment (ROI). An enterprise's overall return on investment (ROI) can be used as a metric to evaluate how effectively a business is handled.

Return on investment (ROI) can be computed as (Net income ÷ Cost of investment) ×100

It is given that selling price per unit is $140 and cost price per unit is $120. Total number of units are 19950.

Thus, total sales = $140×19950 = $2793000

Total cost = $120 × 19950 = $2394000

Thus, net income = $2793000-$2394000 = $399000

It is given that cost of investment = $1995000

Thus, return on investment (ROI) = (Net income ÷ Cost of investment) ×100

= (399000 ÷ 1995000) ×100

= 16.67%

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