Jordan,the owner of a motorcycle firm,wants to reduce the cost of maintaining the existing equipment of his firm.Joe,a salesperson,recommends a new type of equipment to reduce the maintenance costs.The cost of the new equipment is $50,000,but it would save Jordan $75,000 in total.If Jordan decides to purchase the new equipment,then his return on investment will be:

Question

Quizplus · Accepted Answer

Jordan's investment is the cost of the new equipment, which is $50,000. 
The total savings he will receive is $75,000. 
Therefore, his return on investment is ($75,000 - $50,000) / $50,000 = 50%.
To convert to a percentage, multiply by 100%, giving a return of 150%.

Jordan,the Owner of a Motorcycle Firm,wants to Reduce the Cost