If the payback period is 5 years, why is the 5-year ROI not 0%? since there is no profit or loss at the 5 year mark due to the breakeven situation.
@boomerangjack5806
Жыл бұрын
bravo on the case. Is there a way I could practice on the case without someone, basically just by myself?
@rocketblocks
Жыл бұрын
Yep, we've got that functionality available on RocketBlocks: www.rocketblocks.me (there is a free trial where you can check it out. It's called Case Mode)
@jingjiezhou
10 ай бұрын
The interviewer's note has already mentioned the ROI calculation error.
@shubhdey553
11 ай бұрын
the roi is wrong - annual profit (500K) *5 year period - Upfront cost (500K) / upfront cost = 0
@TanmayGaware-jk5rb
2 ай бұрын
The ROI is correct: Profit/ Investment multiply by 100 multiple by 5/100. The 100 is actually the percentage so that's why we will only write 100 and secondly, its 5 years so we will multiply by 5 and divide it by 100. 100 is kinda of lifetime. Its similar technique in identifying number of people aged less than 5 in India so it would be 5/ 70 multiple by 1.4B. The 70 is lifetime of the people
@Gabriel-uq1wn
2 ай бұрын
How is this a bad investment?Why is the 5 year ROI important? Considering a 100k annual profit, doesn’t this investment have an annual ROE of 20%? This seems a good investment. Can someone help me?
@TanmayGaware-jk5rb
2 ай бұрын
The annual profit is 100K, investment cost is 500k, & we had 3 questions- profitable, payback & ROI. Investment is profitable but we have ignored some important costs as mentioned by interviewer & interviewee, payback is less than 5 years which makes it good investment but ROI shows that investment is danger as ROI= Profit/ Investment multiply by 100 multiple by 5/100. The 100 is actually the percentage (ROI always comes in percentage) so that's why we will only write 100 and secondly, its 5 years so we will multiply by 5 and divide it by 100. 100 is kinda of lifetime. Its similar technique in identifying number of people aged less than 5 in India so it would be 5/ 70 multiple by 1.4B. The 70 is lifetime of the people
Пікірлер: 10