Final answer:
To achieve a 10% return on a $1 million investment with a net profit margin of 20%, the additional annual revenue required would be $500,000.
Step-by-step explanation:
To calculate the increase in annual revenue required to provide a 10% return on a capital investment in refurbishment of $1 million, we first determine the additional profit needed. Since a 10% return on $1 million is $100,000, and the net profit margin is 20%, we can calculate the additional revenue needed by dividing the additional profit by the net profit margin.
Additional profit needed for a 10% return = $1 million * 10% = $100,000.
Additional revenue needed = Additional profit / Net profit margin = $100,000 / 20% = $500,000.
Therefore, an increase in annual revenue of $500,000 would be required to provide the additional profit needed for a 10% return on this investment.
To calculate the increase in annual revenue needed to provide the additional profit for a 10% return on the $1 million investment, we first need to determine the profit needed.
The annual return on the investment is calculated as 10% of the capital investment, which is $1 million x 10% = $100,000. Since the net profit is 20%, the additional profit needed for a 10% return is $100,000 / 20% = $500,000. Therefore, the increase in annual revenue required would be $500,000.