Question

Home town grocery has invested in yogurt stands for its stores. the investment cost the company $100,000. variable materials, preparation, and marketing costs are expected to be $.60 a unit and fixed costs are estimated at $6,000 a year. if actual sales were 20,000 servings, what would the roi be at a sales price of $1.70?

Answer 1

Profit = ($1.7 - $0.6) * 20,000 - $6,000 = $16,000 ROI = ($16,000 - $100,000)/$100,000 = -0.84