image credit: Dragon Images
Last week, we learned about calculating your company’s Return on Investment (ROI). We discussed that, in general, the lower the risk, the lower the return—whereas, the higher the risk, the higher the return. This week, we will dig further into Net Profitability and Rate of Return with our example Contractor, XYZ Company. With that as a backdrop, what should the Owner of a construction company require in return for the risks taken?