Question

Ormand Organic Grocery has invested in a yogurt stand for its store. The investment cost the company $100,000. Variable materials, preparation, and marketing costs are expected to be $1.30 per unit and fixed costs are estimated at $7,400 a year. If actual sales were 21,400 servings, what would the ROI be using the sales price of $2.40

Answer 1

Answer:

15.4%

Explanation:

Calculation to determine what would the ROI be

ROI=[ ( $2.40 - $1.30) * 21,400 - $7,400]/100,000

ROI=($1.1 * 14,000)/100,000

ROI=$15,400/100,000

ROI=0.154*100

ROI=15.4%

Therefore the ROI would be 15.4%