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So, in (a) answers there is a note that a calculation of ROI would be acceptable as well.
Could you please show the application of ROI here?Thanks!
The model answer just looks at the annual net benefit of $95,025. However, it requires investment ot achieve this benefit and companies have to decide where best to spend their money. Hence ARR is mentioned in the examiner’s note:
I suppose that would be $95,025/(220,000 + 275,000) = 19%.
That ARR could be compared to a company target and to other uses of the money.
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