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Calculate the roi for models

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Acme manufacturing was considering purchasing updated equipment that would increase the firm's output but expected the new equipment to only last for five years. Acme wanted at least a 25 percent return on investment. You have been tasked with determining the ROI for the new asset and you have two models to compare, neither of which would have any salvageable value at the end of five years. The first (AZ-101) promises $80,000 total profits with an initial investment of $100,000. The second (BY-201) promises $90,000 in total profits with an initial investment of $150,000. Calculate the ROI for both models and make your recommendation for the purchase of one of the models with your reasoning.

Reference no: EM132740678

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