Given:
Net savings = $75,000
Equipment costs = $150,000
To find:
Return on Investment
Solution:
To calculate the return on investment we have to use the following formula,
[tex]\text{Return on investment }=\frac{\text{Cost}}{\text{Savings}}\times100\rightarrow\frac{75000}{150000}\times100[/tex]
[tex]\Rightarrow \text{Return on Investment }=0.5\times100\rightarrow50\%[/tex]
Therefore, the return on investment is 50%.
Return on investment is a measure that is used as a measure to evaluate the investment's efficiency.
