Answer:
The return on investment for Investment Center B is of 26.92%.
Explanation:
The general formula for calculating the return on investment (ROI) is:
[tex]ROI= \frac{Cashflow}{Investment} * 100[/tex]
In this exercise the cashflow is given by the yearly income from each investment, while the asset data gives us the value of the investments.
For investment center A we have that:
ROI = [tex]\frac{415000}{2400000} * 100[/tex] = 17.29%
While for investment center B we have:
ROI = [tex]\frac{525000}{1950000} * 100[/tex] = 26.92%
Since we’re only interested in the affairs of investment center B we use the results we have obtained from the second equation to answer the question: the return on investment for the investment center B is of 26.92%.
