Ahmed and Majeed are lifelong friends and have decided to go into business. They are not sure what form of business ownership and control to use. Ahmed would like to invest his savings of Rs. 250,000 .An existing pizza business is for sale for Rs. 500,000. Ahmed and Majeed both like the idea of investing in a business. Majeed has Rs. 50,000; he would like to contribute and believes that buying an existing business has certain advantages. He likes the idea that Ahmed will not be an active owner and that he will have full control of the pizza operation.The existing business has sales of Rs. 1,500,000 and generates earnings after taxes of Rs. 320,500.
Question:3.How could Ahmed and Majeed determine the return on their investment after their first year of business? Assume that they can borrow the remaining Rs. 200,000 needed to purchase, when answering this question. (ROI= profit shown as a percentage of the capital in business)
Q2: Describe the risk of this business.
2007-03-27 07:45:26 · 1 answers · asked by Lil' Angel 1 in Business & Finance ➔ Other - Business & Finance
sounds like a homework question!
2007-03-27 10:28:09 · answer #1 · answered by MM 5 · 0⤊ 0⤋