Question

You believe your restaurant concept can generate $50,000 in net profit per year. Your investors demand at 20% return on investment. How much can you invest?

Answer 1

You believe your restaurant concept can generate $50,000 in net profit per year. Your investors demand at 20% return on investment. How much can you invest?

If your business generates $50,000 in net profit and the investors demand 20% return on investment to solve for how much the investors will get and how much you can invest follow the steps below:

How much the investors will get in return on investment (ROI):

($50,000)(20%) = $10,000 is what the investors will receive

How much can you invest:

$50,000 - $10,000 = $40,000 is what you can invest