9846

How Much Should I Reinvest in a Business?

Suppose you invest in a business and receive some return. What do you do with it? On the one hand you could just leave it as cash (or in whatever form it is), or you could use that return to reinvest in the same business and expect it to give you a larger return.
The consideration here is: if you reinvest too little, the increase in profit would be small; if you reinvest too much, then you would have very little actual income in your hands. So what percentage of your investment return should be used for reinvestment? This Demonstration does this calculation.

SNAPSHOTS

  • [Snapshot]
  • [Snapshot]
  • [Snapshot]

DETAILS

Assume that you initially invested a certain amount of money into a business to get some revenue. The axis represents the percent of the revenue that is reinvested and the axis represents the total income for the corresponding reinvestment.
For an investment with a return of 100% to 200%, using a retention rate of 80% could maximize income. Though this is not strictly speaking an example of the 80-20 rule, it is still interesting.
    • Share:

Embed Interactive Demonstration New!

Just copy and paste this snippet of JavaScript code into your website or blog to put the live Demonstration on your site. More details »

Files require Wolfram CDF Player or Mathematica.









 
RELATED RESOURCES
Mathematica »
The #1 tool for creating Demonstrations
and anything technical.
Wolfram|Alpha »
Explore anything with the first
computational knowledge engine.
MathWorld »
The web's most extensive
mathematics resource.
Course Assistant Apps »
An app for every course—
right in the palm of your hand.
Wolfram Blog »
Read our views on math,
science, and technology.
Computable Document Format »
The format that makes Demonstrations
(and any information) easy to share and
interact with.
STEM Initiative »
Programs & resources for
educators, schools & students.
Computerbasedmath.org »
Join the initiative for modernizing
math education.
Step-by-step Solutions »
Walk through homework problems one step at a time, with hints to help along the way.
Wolfram Problem Generator »
Unlimited random practice problems and answers with built-in Step-by-step solutions. Practice online or make a printable study sheet.
Wolfram Language »
Knowledge-based programming for everyone.
Powered by Wolfram Mathematica © 2014 Wolfram Demonstrations Project & Contributors  |  Terms of Use  |  Privacy Policy  |  RSS Give us your feedback
Note: To run this Demonstration you need Mathematica 7+ or the free Mathematica Player 7EX
Download or upgrade to Mathematica Player 7EX
I already have Mathematica Player or Mathematica 7+