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If I have the ROI for two different vendors for an MRI machine purchase, how do...

If I have the ROI for two different vendors for an MRI machine purchase, how do I find what a reasonable ROI is? I know that the ROI for Company A is 139.53% and Company B is 120.39 % with Company A being the better choice. How would you determine what the "Reasonable ROI" is?

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Answer #1

Answer:-

Return of Investment is the income which company earns on capital investment.

ROI=Return/Investment

ROI of company A is higher meaning company A can earn better than company B on the capital investment.

ROI is considered reasonable if it is above the cost of capital.i.e.,if it is higher than the interest paid on capital.

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