Program A has a profit of $5,000 and an investment of $100,000, while program B has a profit of $10,000 and an investment of $220,000. Which program has the better ROI?
Program A: (5000/100,000)*100 = 5%Profit.
Program B: (10,000/220,000)*100 = 4.55%
Profit.
To determine which program has the better Return on Investment (ROI), we need to calculate the ROI for each program.
ROI is typically calculated by dividing the net profit by the investment and expressing it as a percentage. The formula for ROI is:
ROI = (Net Profit / Investment) x 100
Let's calculate the ROI for Program A:
ROI for Program A = (Net Profit for Program A / Investment for Program A) x 100
Given that the profit for Program A is $5,000 and the investment is $100,000, we can substitute these values into the formula:
ROI for Program A = ($5,000 / $100,000) x 100 = 0.05 x 100 = 5%
Now let's calculate the ROI for Program B:
ROI for Program B = (Net Profit for Program B / Investment for Program B) x 100
Given that the profit for Program B is $10,000 and the investment is $220,000, we can substitute these values into the formula:
ROI for Program B = ($10,000 / $220,000) x 100 = 0.045 x 100 = 4.545%
Comparing the two ROI values, we can see that Program A has a higher ROI of 5%, while Program B has an ROI of 4.545%. Therefore, Program A has the better ROI.
To compare the Return on Investment (ROI) for program A and program B, we can use the following formula:
ROI = (Profit / Investment) * 100
For program A:
ROI = (5000 / 100000) * 100
= 5%
For program B:
ROI = (10000 / 220000) * 100
= 4.55%
Comparing the two, program A has a higher ROI of 5%, while program B has an ROI of 4.55%. Therefore, program A has a better ROI.