I need help on the ROI problem

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Could anyone help me on this problem plsssss. The answer is provided at 10.97%, but i dont know how to get that number.

Saba Printing has an average revenue of $154,000 per month. Variable costs are 62% of revenue and fixed costs amount to 43% of variable costs. The company has an investment of $1,910,000. Company’s return on investment amount to?
 

Triest123

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It's, in fact, a very simple maths question....

ROI = Annual Operating Profit / Cost of Investment
 
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It is supper easy
let me explain it to you
First let's know the revenue per year = 154000*12= 1848000
second we need to know the fixed cost per year since it's 62% of the revenue=
1848000*62%= 1145760 per year
third let's get the variable cost ( sine it's 43% of the fixed cost)=
1145760*43%=492676.8 per year
Now we can get the net income per year which is = 1848000- ( 1145760+492676.8)=
1848000-1638436.8=209563.2 this is the net revenue per year

Now we can know the return on investment by dividing the revenue on the total of investment which is = 209563.2 / 1910000= 10.97%

Good Luck
 

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