If Net profit is $20,000 and Cost of investment is $100,000, what is ROI?

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Study for the GMetrix Marketing Test. Prepare with flashcards and multiple-choice questions, each question offers hints and explanations. Ensure success with comprehensive study materials for your exam!

Multiple Choice

If Net profit is $20,000 and Cost of investment is $100,000, what is ROI?

Explanation:
ROI shows how much profit you earn for each dollar invested. You calculate it by dividing net profit by the cost of the investment and then turning that ratio into a percentage. Here, 20,000 divided by 100,000 equals 0.2, which is 20%. So the return on investment is 20%, meaning for every dollar invested you earn 20 cents in profit.

ROI shows how much profit you earn for each dollar invested. You calculate it by dividing net profit by the cost of the investment and then turning that ratio into a percentage. Here, 20,000 divided by 100,000 equals 0.2, which is 20%. So the return on investment is 20%, meaning for every dollar invested you earn 20 cents in profit.

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