Compute the return on investment (rounded to nearest percent)for the Tim Tom investment center from the information given below.
A)21%
B)18%
C)15%
D)12%

Question

Compute the return on investment (rounded to nearest percent)for the Tim Tom investment center from the information given below. 
A)21% 
B)18% 
C)15% 
D)12%

Quizplus · Accepted Answer

To calculate the return on investment, we need to divide the net income by the initial investment and multiply by 100 to get a percentage. From the information given in the exhibit, we can see that the net income for the year is $700,000 and the initial investment is $3,333,333. Therefore, the ROI is:

ROI = (Net Income / Initial Investment) x 100
ROI = ($700,000 / $3,333,333) x 100
ROI = 0.21 x 100
ROI = 21%

Option A provides the highest ROI, so it is the best choice.

Compute the Return on Investment (Rounded to Nearest Percent)for the Tim