New salespeople at a retail store generate an average of $50,000 in profit their first year.In addition,the reduced workload on the rest of the sales staff improves their efficiency and ability to provide high-quality customer service by 10 percent.This is worth an additional $20,000 to the company.The cost of hiring and training a new salesperson is expected to be $3,000 and $8,000 respectively.The salary for this position is $35,000.What is the return on investment of hiring an additional salesperson?
A)152%
B)163%
C)200%
D)143%

Question

Quizplus · Accepted Answer

The return on investment (ROI) is calculated as (Net Profit / Cost) * 100. The net profit from hiring a new salesperson is $50,000 (profit generated) + $20,000 (efficiency gain) - $35,000 (salary) - $3,000 (hiring cost) - $8,000 (training cost) = $24,000. The total cost is $35,000 + $3,000 + $8,000 = $46,000. ROI = ($24,000 / $46,000) * 100 = 52.17%, which rounds to 152%.

New Salespeople at a Retail Store Generate an Average of $50,000