Quiz : 4th Question

If you took $20 million as debt to fund a $200 million project. Assuming 10% interest on the debt and returns of $500 million in 5 years. What is your ROI?

Correct answer shown is 161% ROI, however calculations reach out to 216%, could you please check and let me know what am I missing?

If you took $20 million as debt to fund a $200 million project. Assuming 10% interest on the debt and returns of $500 million in 5 years. What is your ROI?

Correct answer shown is 161% ROI, however calculations reach out to 216%, could you please check and let me know what am I missing?

Jul 16 2013 05:18 PM

In this question Debt is 20 million and interest 10% so after 5 year you have to return 30 million....if expected return after 5 years is 500 million then left over is 470 million and your investment is 180 million so ROI = (470-180)/180=161%

Jul 25 2013 12:35 PM