A project requires an initial investment of $40,000 and yields a net profit of $6,000 over the evaluation period. What is the ROI expressed as a percentage?

• A. 12%.
• B. 10%.
• C. 18%.
• D. 15%.

Answer: (D)

ROI shows how much profit you earn for each dollar invested, expressed as a percentage. It’s calculated by dividing net profit by the initial investment and then multiplying by 100. Here, net profit is 6,000 and the initial investment is 40,000, so ROI = (6,000 / 40,000) × 100 = 0.15 × 100 = 15%. Therefore, the project yields 15% ROI. For context, 12% would imply 4,800 profit, 10% would be 4,000, and 18% would be 7,200, so 15% matches the given figures.