If net profit is 60,000 and investment is 150,000, what is ROI as a percent?

If net profit is 60,000 and investment is 150,000, what is ROI as a percent?

• A. 20%
• B. 40%
• C. 30%
• D. 50%

Answer: (B)

Return on investment shows how much profit is earned per unit of money invested. It’s calculated as net profit divided by the investment, then multiplied by 100 to express it as a percentage. Here, net profit is 60,000 and the investment is 150,000. 60,000 ÷ 150,000 = 0.4, which equals 40% when converted to a percentage. So the ROI is 40%. This means for every dollar invested, 0.40 dollars of profit are generated, i.e., 40% of the invested amount is converted into profit. If the ROI were 20%, the profit would be 30,000; 30% would be 45,000; 50% would be 75,000.

Return on investment shows how much profit is earned per unit of money invested. It’s calculated as net profit divided by the investment, then multiplied by 100 to express it as a percentage.

Here, net profit is 60,000 and the investment is 150,000. 60,000 ÷ 150,000 = 0.4, which equals 40% when converted to a percentage. So the ROI is 40%. This means for every dollar invested, 0.40 dollars of profit are generated, i.e., 40% of the invested amount is converted into profit.

If the ROI were 20%, the profit would be 30,000; 30% would be 45,000; 50% would be 75,000.