Bekah put down $50,000 toward the purchase price and has a cash flow of $10,000 after repairs and debt service. What is her ROI?

To calculate the Return on Investment (ROI) for Bekah, we need to determine how much profit she made relative to her initial investment. In this case, Bekah's contribution to the purchase price is $50,000, and her cash flow after repairs and debt service is $10,000.

ROI is calculated using the formula:

[ \text{ROI} = \left( \frac{\text{Net Profit}}{\text{Total Investment}} \right) \times 100 ]

In this scenario, Bekah's net profit is her cash flow, which is $10,000, and her total investment is the amount she put down, which is $50,000. Plugging these values into the formula gives:

[ \text{ROI} = \left( \frac{10,000}{50,000} \right) \times 100 ] [ \text{ROI} = (0.2) \times 100 ] [ \text{ROI} = 20% ]

Thus, Bekah’s ROI is 20%. This indicates that for every dollar she invested, she generated a return of 20 cents in profit after covering her expenses. This showcases her investment's effectiveness