Calculate the ROI based on the cash flows of each year:

\begin{tabular}{|l|l|l|l|l|l|l|}
\hline
& 2020 & 2021 & 2022 & 2023 & 2024 & 2025 \\
\hline
Cash Flows & [tex]$-\$[/tex]2000[tex]$ & $[/tex]\[tex]$100$[/tex] & [tex]$\$[/tex]300[tex]$ & $[/tex]\[tex]$500$[/tex] & [tex]$\$[/tex]700[tex]$ & $[/tex]\[tex]$900$[/tex] \\
\hline
\end{tabular}

A. 25\%
B. 15\%
C. 35\%
D. 45\%



Answer :

To calculate the Return on Investment (ROI) based on the given cash flows for each year, let's break down the steps comprehensively:

1. List the Cash Flows per Year:
- Year 2020: [tex]\(-\$2000\)[/tex]
- Year 2021: [tex]\(+\$100\)[/tex]
- Year 2022: [tex]\(+\$300\)[/tex]
- Year 2023: [tex]\(+\$500\)[/tex]
- Year 2024: [tex]\(+\$700\)[/tex]
- Year 2025: [tex]\(+\$900\)[/tex]

2. Calculate Total Cash Flow:
- [tex]\( -2000 + 100 + 300 + 500 + 700 + 900 \)[/tex]

Adding these values together:
- [tex]\( -2000 + 100 = -1900 \)[/tex]
- [tex]\( -1900 + 300 = -1600 \)[/tex]
- [tex]\( -1600 + 500 = -1100 \)[/tex]
- [tex]\( -1100 + 700 = -400 \)[/tex]
- [tex]\( -400 + 900 = 500 \)[/tex]

Therefore, the total cash flow is [tex]\(\$500\)[/tex].

3. Determine the Initial Investment:
- The initial investment is the cash flow in the first year (2020), which is [tex]\(-\$2000\)[/tex].

4. Calculate the Return on Investment (ROI):
The formula for ROI is:
[tex]\[ ROI = \left( \frac{\text{Net Profit}}{\text{Initial Investment}} \right) \times 100 \][/tex]
Where:
- Net Profit = Total Cash Flow - Initial Investment
- Total Cash Flow = \[tex]$500 - Initial Investment = \(-\$[/tex]2000\)

Plugging in the values:
- Net Profit = [tex]\( \$500 - (-\$2000) = \$500 + \$2000 = \$2500 \)[/tex]

Therefore:
[tex]\[ ROI = \left( \frac{\$2500}{|\$2000|} \right) \times 100 = \left( \frac{\$2500}{\$2000} \right) \times 100 = 1.25 \times 100 = 125\% \][/tex]

5. Conclusion:
The Return on Investment (ROI) based on the cash flows for each year is [tex]\(125\%\)[/tex].

Therefore, none of the provided choices [tex]\(25\%, 15\%, 35\%, 45\%\)[/tex] are correct. The correct ROI is [tex]\(125\%\)[/tex].