you are thinking about installing an air freshener vending machine at a car wash. the manufacturer of the…

you are thinking about installing an air freshener vending machine at a car wash. the manufacturer of the machine claims that you can expect a 25% - 40% roi with this investment. based on the roi, would this be a good investment? choose 1 answer: a yes, because roi is positive and higher than 7% b no, anything less than 100% roi is a loss c no, this roi is not high enough

you are thinking about installing an air freshener vending machine at a car wash. the manufacturer of the machine claims that you can expect a 25% - 40% roi with this investment. based on the roi, would this be a good investment? choose 1 answer: a yes, because roi is positive and higher than 7% b no, anything less than 100% roi is a loss c no, this roi is not high enough

Answer

Explanation:

Step1: Understand ROI concept

ROI (Return - on - Investment) is a profitability measure. A positive ROI indicates profit. A higher ROI is generally more favorable. A common benchmark for a “good” investment in some cases is an ROI higher than the cost of capital or a standard rate of return (e.g., 7% in some simple comparisons).

Step2: Analyze given ROI range

The given ROI range is 25% - 40%. Since this range is positive and higher than 7%, it is a good investment.

Answer:

A. yes, because ROI is positive and higher than 7%