Question

"Jaymes Corporation produces high-performance rotors. It expects to produce 78,000 rotors in the coming year. It has invested $12,566,667 to produce rotors. The company has a required return on investment of 18%. What is its ROI per unit

Answer 1

$29

Explanation:

The computation of return on investment per unit is shown below:-

Return on investment = Total Investment × Required Rate on Investment

= $12,566,667 × 18%

= $2,262,000.06

Return in investment per unit = Required ROI ÷ Total Rotors

= $2,262,000.06 ÷ 78,000

= $29

Therefore for computing the return on investment we simply applied the above formula.