Return on Investment and Return of Investment John invested $250,000 into a business that earned a profit of 2,250 during the past month as shown below. John believes the business will earn an annual profit equal to twelve times the monthly profit. Assume John wants to take $20,000 from the business each year for his personal use.

Resources created from sales

$17,000

Resources consumed:

Materials

$7,500

Insurance

1,500

Rent

2,000

Utilities

950

Wages

2,800

Total cost of resources consumed

14,750

Profit earned

$2,250

Required

A. Determine the company’s return on investment.

B. Determine John’s return of investment.