To assess the attractiveness of buying a store that generates monthly income, it is important to calculate the return on investment (ROI). ROI is calculated as follows:
ROI = (Annual Income / Initial Investment) x 100
First, let's calculate the annual income based on the monthly income:
Annual Income = Monthly Income x 12 Annual Income = 600 x 12 = 7,200
Now, we can calculate the ROI:
ROI = (7,200 / 136,000) x 100 ˜ 5.29%
The ROI is approximately 5.29%. This means that if you buy the store for 136,000.00 and receive an annual income of 7,200, the return on investment is about 5.29% per year.