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Question 8You expect that a project will bring in $12,000 USD in revenue per year. You estimate it will cost $5,000 up front. You also estimate costs of $50 per month for the first 12 months, which equals $600 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?1 point(12,000 - 5,600) ÷ 5,000 = 128%(5,600 - 5,000) ÷ 12,000 = 5%(12,000 - 5,000) ÷ 5,000 = 140%(12,000 - 5,600) ÷ 5,600 = 114%

Question

Question 8You expect that a project will bring in 12,000USDinrevenueperyear.Youestimateitwillcost12,000 USD in revenue per year. You estimate it will cost 5,000 up front. You also estimate costs of 50permonthforthefirst12months,whichequals50 per month for the first 12 months, which equals 600 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?1 point(12,000 - 5,600) ÷ 5,000 = 128%(5,600 - 5,000) ÷ 12,000 = 5%(12,000 - 5,000) ÷ 5,000 = 140%(12,000 - 5,600) ÷ 5,600 = 114%

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Solution

To calculate the project's return on investment (ROI) after the first 12 months, you would use the formula (G-C) ÷ C = ROI, where G is the gain from the investment (the revenue) and C is the cost of the investment.

First, you need to calculate the total cost of the project after the first 12 months. This includes the upfront cost of 5,000andthemonthlycostsof5,000 and the monthly costs of 50 for the first 12 months, which equals 600.So,thetotalcost(C)is600. So, the total cost (C) is 5,000 + 600=600 = 5,600.

Next, you subtract this total cost from the total revenue (G), which is 12,000.So,thecalculationis12,000. So, the calculation is 12,000 - 5,600=5,600 = 6,400.

Finally, you divide this result by the total cost to get the ROI. So, the calculation is 6,400÷6,400 ÷ 5,600 = 1.14 or 114%.

So, the correct answer is "(12,000 - 5,600) ÷ 5,600 = 114%".

This problem has been solved

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