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Calculate the total cost of investment.

Business/Management

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Answers

2 parts
1

−33.33%-33.33\%

2

−22.22%-22.22\%

Step-by-step solution

6 steps

Here are the calculations for the return on investment for both questions.

Part 1· 3 steps

Calculate the return on investment for XYZ.

  1. Calculate the total cost of investment.

    Total Cost=Number of Units×Purchase Price Per Unit\text{Total Cost} = \text{Number of Units} \times \text{Purchase Price Per Unit} Total Cost=1,000 units×N9/unit=N9,000\text{Total Cost} = 1,000 \text{ units} \times \text{N}9/\text{unit} = \text{N}9,000

  2. Calculate the current market value of the investment.

    Current Market Value=Number of Units×Market Price Per Share\text{Current Market Value} = \text{Number of Units} \times \text{Market Price Per Share} Current Market Value=1,000 units×N6/share=N6,000\text{Current Market Value} = 1,000 \text{ units} \times \text{N}6/\text{share} = \text{N}6,000

  3. Calculate the Return on Investment (ROI).

    ROI=Current Market Value−Total CostTotal Cost×100%\text{ROI} = \frac{\text{Current Market Value} - \text{Total Cost}}{\text{Total Cost}} \times 100\% ROI=N6,000−N9,000N9,000×100%\text{ROI} = \frac{\text{N}6,000 - \text{N}9,000}{\text{N}9,000} \times 100\% ROI=−N3,000N9,000×100%\text{ROI} = \frac{-\text{N}3,000}{\text{N}9,000} \times 100\% ROI=−0.3333×100%\text{ROI} = -0.3333 \times 100\% ROI=−33.33%\text{ROI} = \boxed{-33.33\%}

Part 2

−22.22%-22.22\%

What is the return on investment for JJC Nigeria Ltd?

  1. Identify the cost of investment per unit.

    Cost of Investment Per Unit=N18\text{Cost of Investment Per Unit} = \text{N}18

  2. Identify the current value of investment per unit.

    Current Value Per Unit=N14\text{Current Value Per Unit} = \text{N}14

  3. Calculate the Return on Investment (ROI).

    ROI=Current Value Per Unit−Cost of Investment Per UnitCost of Investment Per Unit×100%\text{ROI} = \frac{\text{Current Value Per Unit} - \text{Cost of Investment Per Unit}}{\text{Cost of Investment Per Unit}} \times 100\% ROI=N14−N18N18×100%\text{ROI} = \frac{\text{N}14 - \text{N}18}{\text{N}18} \times 100\% ROI=−N4N18×100%\text{ROI} = \frac{-\text{N}4}{\text{N}18} \times 100\% ROI=−0.2222×100%\text{ROI} = -0.2222 \times 100\% ROI=−22.22%\text{ROI} = \boxed{-22.22\%}
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