Explanation
Return on investment = Net profit / Investment
where:
Profit for the first year is $60 000, second year = $ 120 000 ; third year = $ 180 000 ; and fourth year = $
240 000
investment in first year = $ 180 000, by year 2 = $ 182 000; by year 3 = $ 184 000 ; and by year 4 = $ 186 000 Thus you will only get a return on the investment in 4 years' time.
References:
http://www.financeformulas.net/Return_on_Inve