anonymous
  • anonymous
Can someone help me determine the ROI?
Mathematics
  • Stacey Warren - Expert brainly.com
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SOLVED
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schrodinger
  • schrodinger
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anonymous
  • anonymous
@jim_thompson5910
jim_thompson5910
  • jim_thompson5910
go ahead
anonymous
  • anonymous
I know the equation is the final value - initial investment/initial investment

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anonymous
  • anonymous
however when i calculated the initial investment for this assignment i got that it was 6694
anonymous
  • anonymous
now i am having complications calculating the final value bc it is not stated here
jim_thompson5910
  • jim_thompson5910
ok post the problem so I can have a look
anonymous
  • anonymous
I know that I have to use the compund interest formula
anonymous
  • anonymous
the principal value would be the 6694 but i am not sure how am i supposed to plug in the rest
anonymous
  • anonymous
and its a file though bc the students have to look for the information at a website called the nyse and i am doing research on the coca cola company @jim_thompson5910
jim_thompson5910
  • jim_thompson5910
a text file? or something like it?
anonymous
  • anonymous
1 Attachment
anonymous
  • anonymous
i am not sure if this will help https://www.nyse.com/quote/XNYS:KO
anonymous
  • anonymous
take a look at it @jim_thompson5910
jim_thompson5910
  • jim_thompson5910
ok reading now
jim_thompson5910
  • jim_thompson5910
ok so you bought 200 shares in 1998 and sold them all in 2008 and you're trying to find the ROI, correct?
anonymous
  • anonymous
yes sir
jim_thompson5910
  • jim_thompson5910
assuming you bought the 200 shares at the closing price, you have the correct cost $33.47*200=$6694
anonymous
  • anonymous
yup
jim_thompson5910
  • jim_thompson5910
now also assume you sell the 200 shares at the closing price in 2008 closing price per share = $30.93 30.93*200 = 6,186
anonymous
  • anonymous
is that roi?
jim_thompson5910
  • jim_thompson5910
\[\Large \text{ROI} = \frac{\text{Total Revenue} - \text{Total Cost}}{\text{Total Cost}}\] \[\Large \text{ROI} = \frac{6186 - 6694}{6694}\] \[\Large \text{ROI} = \frac{-508}{6694}\] \[\Large \text{ROI} \approx -0.07588885569167\] The negative ROI means that you lost money. So this is a bad investment. Of course, the decision to sell when the price per share in 2008 is lower than the price per share in 1998, is the reason why this is a bad decision.
anonymous
  • anonymous
Can you help me do the same for todays investment
jim_thompson5910
  • jim_thompson5910
notice how it says "High:$31.36" so there is no way to get a positive ROI if you sell the shares in 2008
jim_thompson5910
  • jim_thompson5910
recall that the stock market sharply plunged in 2008, so selling stocks would have made a negative ROI on many stocks
anonymous
  • anonymous
that is true
jim_thompson5910
  • jim_thompson5910
June 22, 2015 Close:$40.48 Assume you sell the shares at the closing price
jim_thompson5910
  • jim_thompson5910
Revenue = (# of shares)*(price per share) = 200*40.48 = 8,096
jim_thompson5910
  • jim_thompson5910
what ROI do you get?
anonymous
  • anonymous
8096-6694/6694
jim_thompson5910
  • jim_thompson5910
Yep \[\Large \text{ROI} = \frac{\text{Total Revenue} - \text{Total Cost}}{\text{Total Cost}}\] \[\Large \text{ROI} = \frac{8096 - 6694}{6694}\] \[\Large \text{ROI} = ???\]
anonymous
  • anonymous
0.2094412907
jim_thompson5910
  • jim_thompson5910
correct, so you made some money if you sold in 2015 (in contrast to 2008 where you lost money)
anonymous
  • anonymous
thank you so much jim
jim_thompson5910
  • jim_thompson5910
no problem

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