Hi,
I have been given a project to complete however I am having a very difficult time with it as the level of knowledge required to complete is above my current training.
A company has a $500,000 initial investment. They cannot borrow anymore for the remainder of the year.
In this example (I have attached a picture of the sheet I am working with), what does the ROI and margin mean exactly? I thought the "ROI in months" would be the amount of time it takes to recoup the initial investment into the development of the product that is being sold to the customer (COS or COGS), right? There are three different customer types, consumer, small business, and large business.
For the consumer I went ahead and multiplied the margin by the revenue (10% * $500) for a result of $50. That is supposed to be the profit per unit produced correct? Or is that not right? I did that for the consumer and multiplied it by the "ROI in months" (7) and came up with the result of $350, which is greater than the initial acquisition cost of the consumer ($300). That seemed to make some sense? I then tried that with the small and large businesses however and it did not work like that at all.
I don't normally handle these kinds of questions so I apologize if I sound clueless because I am.
Here is a link to a screenshot I took of my worksheet. http://imgur.com/52CwgWa
Here is the screenshot:
Any help or advice is appreciated!
I have been given a project to complete however I am having a very difficult time with it as the level of knowledge required to complete is above my current training.
A company has a $500,000 initial investment. They cannot borrow anymore for the remainder of the year.
In this example (I have attached a picture of the sheet I am working with), what does the ROI and margin mean exactly? I thought the "ROI in months" would be the amount of time it takes to recoup the initial investment into the development of the product that is being sold to the customer (COS or COGS), right? There are three different customer types, consumer, small business, and large business.
For the consumer I went ahead and multiplied the margin by the revenue (10% * $500) for a result of $50. That is supposed to be the profit per unit produced correct? Or is that not right? I did that for the consumer and multiplied it by the "ROI in months" (7) and came up with the result of $350, which is greater than the initial acquisition cost of the consumer ($300). That seemed to make some sense? I then tried that with the small and large businesses however and it did not work like that at all.
I don't normally handle these kinds of questions so I apologize if I sound clueless because I am.
Here is a link to a screenshot I took of my worksheet. http://imgur.com/52CwgWa
Here is the screenshot:
Any help or advice is appreciated!