A business is planning to invest in a new machine which will cost £220 000. The machine will lead to an annual increase in revenue of £75 000. It will also lead to extra labour costs of £28 000 per annum but will reduce the firm’s energy costs by £4 000

Annual return is £75 000 – £28 000 + £4 000 = £51 000 Return on investment = annual return x 100 = £51 000 x 100 = initial cost £220 000 Answer = 23.2% or 23%

Related Business Studies University answers

All answers ▸

What are the differences between shareholder and stakeholder?


Explain the difference between a public and private limited company


What is a PESTLE analysis, and what is it used for?


Explain some of the differences between an entrepreneurial endeavour an established business.


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences