GCSE Business 2020-2022 OCR: John Lewis decides for some reason to spend 50,000 on Vehicles
This Investment is Expected to generate 15,000 per Year, and is to last for 5 Years. Give me the ARR

Question

John Lewis decides for some reason to spend 50,000 on Vehicles
This Investment is Expected to generate 15,000 per Year, and is to last for 5 Years. Give me the ARR

eric_galvao · Accepted Answer

-First, we want the AVERGE ANNUAL PROFIT so:
-15,000 x 5 = 75,000 [Revenue for 5 Years] - 50,000 = 25,000 [Profit for 5 Years] / 5  = 5,000 [Profit Per Year, Average] 
-Now we can Substitute into the Formula for ARR
-5,000 / 50,000 x 100 = 10%

GCSE Business 2020-2022 OCR

John Lewis decides for some reason to spend 50,000 on Vehicles This Investment is Expected to generate 15,000 per Year, and is to last for 5 Years. Give me the ARR

-First, we want the AVERGE ANNUAL PROFIT so: -15,000 x 5 = 75,000 [Revenue for 5 Years] - 50,000 = 25,000 [Profit for 5 Years] / 5 = 5,000 [Profit Per Year, Average] -Now we can Substitute into the Formula for ARR -5,000 / 50,000 x 100 = 10%

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