Mark Is Planning on Making an Investment in a New

question 68

Multiple Choice

Mark is planning on making an investment in a new computer system. He wants to know how much he must invest to have $9,000 in 4 years if the interest rate is 5% per year?

• A)$10,939.59
• B)$2,479.41
• C)$7,826.83
• D)$7,404.30

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Definitions:

Return On Investment (ROI)

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.

Net Operating Income

This refers to the profit realized from a business's operational activities, excluding taxes and interest.

Contribution Margin Ratio

A financial metric that measures the proportion of revenue that exceeds variable costs, indicating how much earnings can contribute towards fixed costs and profit.

Combined Margin

refers to the total margin generated by a product or entity after accounting for various types of costs, merging both gross and net margins to provide an overall profitability measure.