Suppose you are prepared to invest $60,000 to buy a business and you want a 20 percent return on your investment. How much cash would have to be available from the cash flow of the new business each year to give you this 20 percent return?

Question

Quizplus · Accepted Answer

To achieve a 20% return on a $60,000 investment, you need to earn 20% of $60,000 each year, which is $60,000 * 0.20 = $12,000.

Suppose You Are Prepared to Invest $60,000 to Buy a Business